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As red ink continues to flow, more experts say some nationalization is likely

(NEWSER) - With US banks likely to need as much as $2 trillion in capital in coming months, more experts are seeing semi-nationalization as a distinct possibility, writes Reuters reporter Dan Wilchins. The government already is using its $700 billion bailout to put pressure on banks. The Obama administration is on record as saying that it will push banks seeking federal funds for more concessions, specifically limiting dividends and executive pay. More»

Rivals may take risks, expecting taxpayer protection

(NEWSER) - The Citigroup rescue bolstered confidence in the financial sector in the short term, but in the long term it could spell more trouble for taxpayers and other struggling banks, writes Eric Dash in the New York Times. Other banks will see the bailout as a template for future ones—giving them a backstop for risky plays and even a way to gain a competitive advantage. It's only a matter of time before they begin lining up, Dash writes. More»

(NEWSER) - Citigroup said today it's going to let Wells Fargo go ahead with its acquisition of Wachovia, the Wall Street Journal reports. But all's not chummy in the banking world: Citigroup, which charges that Wachovia illegally backed out of a deal to accept a sweeter offer from Wells Fargo, is still going to sue for billions in damages. More»

New book says Obama's team routinely undermined him

(NEWSER) - In March 2009, in the throes of the financial crisis, Barack Obama told Tim Geithner to focus on a proposal to dissolve Citigroup—but the Treasury Secretary ignored him and never developed a plan, according to former Wall Street Journal reporter Ron Suskind’s new book Confidence Men. In the book, which was obtained early by the AP and the New York Times , Suskind writes that Obama’s “authority was being systematically undermined or hedged by his seasoned advisers.” More»

But officials and execs cite successful effort to battle bad loans

(NEWSER) - The 165 banks that toppled like dominoes in the financial crisis have stuck the FDIC with a hefty tab to the tune of $9 billion, the Wall Street Journal reports. Regulators have helped shoulder the burden of bad assets and loans at the failed banks; the loss-sharing agreements encouraged healthier institutions to purchase failed ones. The FDIC, which has agreed to take on most future losses in the arrangements, expects to shell out another $21.5 billion over the next three years. More»