Stop Stalling and Nationalize Bailout Banks: Krugman

Banking chair weighs short-term moves

(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." More»

Case for Nationalization grows

(NEWSER) - Team Obama is coming closer and closer to using the N-word they've been studiously avoiding: nationalize. Already the government is the top shareholder at both Bank of America and Citigroup, and with both banks in freefall, many think buying the rest is the only option. “I would guess that sometime in the next few weeks, President Obama and Tim Geithner will come out and say, ‘It’s much worse than we thought,’ and just bite the bullet,” said one economist. More»

But headhunting 'selective,' notes banker

(NEWSER) - After cutting thousands of jobs over the past two years, American banks are rushing to fill them again as business picks up, Reuters reports. “Back in March and April, no one really knew if the investment banking business was going to exist again," said a search firm exec. "The world has changed dramatically in the last four to five months and now banks are hiring." More»

(NEWSER) - The Obama administration is expected to tell 10 of 19 banks receiving "stress tests" to raise more capital as a buffer against possible dark days ahead, the Wall Street Journal reports. Down from a recent estimate that 14 banks needed more money, the list may include Wells Fargo, Bank of America, and Citigroup. Officials plan to start breaking the news to banks tomorrow and release official results Thursday. More»

Conversion could stretch bailout fund by $100 billion

(NEWSER) - President Obama’s economic team has figured a way to keep the banks afloat without asking Congress for more money, by converting the government's existing bailout loans to common stock, the New York Times reports. The conversion plan could stretch Treasury’s fund by more than $100 billion, but it would expose taxpayers to increased risk and would be another step in the politically explosive direction of nationalization. More»