With credit markets still largely frozen, the U.S. Treasury Department is considering a new strategy: taking direct equity stakes in struggling banks in the hopes that they will resume lending.
According to the Wall Street Journal, "No such moves are imminent," suggesting that Treasury is floating a trial balloon via the press.
The idea has been kicked around by many expert critics of the recently passed $700 billion bailout bill, which Treasury officials say gives them the authority to take part ownership of any banks that request it. It resembles Britain's own recently announced $87 bailout plan as well as the strategy employed successfully by Sweden in the 1990s.
"One thing we must recognize: Even with the new Treasury authorities, some financial institutions will fail," cautioned Treasury Secretary Henry Paulson in comments alluding to the move.
The news came as the U.S. Federal Reserve authorized hobbled insurance giant AIG to receive another $38 billion.
Oil prices, meanwhile, are collapsing, leading OPEC to consider an emergency meeting.
Decision '08
The candidates are swinging -- and taking swings at each other -- through the Midwest. Today's schedule here.
Some Democratic strategists are predicting a landslide win for Barack Obama.
One of the winners of the Nobel Prize in Chemistry endorsed Obama.
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