Further Alarming Investors? Surely You Jest
U.S. Clears Path to Bank Takeovers Obama's Revised Plan for Industry Aid Could Result in Nationalization
By Binyamin Appelbaum and David Cho Washington Post Staff Writers Tuesday, February 24, 2009; A01
The Obama administration yesterday revamped the terms of its emergency aid to troubled financial firms, setting a course that could culminate with the government nationalizing some of the country's largest banks by taking a controlling ownership stake.
Administration officials said the change, which allows banks to repay the government with common stock rather than cash, is intended to give banks more capital to withstand a continued deterioration of the economy, and not to nationalize the banking system.
. . . The move is a significant gamble. The magnitude of the effort could underscore the severity of the crisis, further alarming investors. The government could also forego billions of dollars in dividend payments.
. . . Administration officials said the goal of the revised program is to …