Dodd Backs Nationalizing Banks; White House Doesn't

Banking chair weighs short-term moves
By Nick McMaster,  Newser Staff
Posted Feb 20, 2009 3:19 PM CST
Citigroup Chief Executive Officer Vikram Pandit, left, testify on Capitol Hill in Washington, Wednesday, Feb. 11, 2009, before the House Financial Services Committee.    (AP Photo/Manuel Balce Ceneta)
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(Newser) – Chris Dodd says the US may have to nationalize the most troubled banks for “a short time” to save the financial system, Bloomberg reports. The chairman of the Senate Banking Committee joined Ben Bernanke and Alan Greenspan in calling for serious consideration of nationalizing flailing institutions such as Bank of America and Citigroup. Within hours, White House spokesman Robert Gibbs countered, "This administration continues to strongly believe that a privately held banking system is the correct way to go."

“I don’t welcome that at all, but I could see how it’s possible it may happen,” Dodd told Bloomberg. “I’m concerned that we may end up having to do that, at least for a short time.” The Obama administration does not support nationalization, holding out hope that its bailout efforts can foster recovery in the privately held banking system. "I think I was very clear about the system this country has and will continue to have," Gibbs said.