Gov’t mulls plan to take ownership stakes in banks

October 12, 2008 by News Bites 

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WASHINGTON (AP) - Treasury Secretary Henry Paulson told international leaders on Sunday that isolationism and protectionism could worsen the spreading financial crisis. With a new trading week dawning, U.S. lawmakers urged quick action by the Bush administration on measures to make direct purchases of bank stock to help unlock lending.

Sen. Chuck Schumer, chairman of the Joint Economic Committee, said an administration proposal to inject federal money directly into certain banks, in effect partially nationalizing the banking system, “is gaining steam.”

“I am hopeful that tomorrow, the Treasury will announce that they’re doing it. And they have to do it quickly … markets are waiting,” Schumer said.

The administration has not indicated when it would announce next steps.

http://apnews.myway.com/article/20081012/D93P5CD80.html

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