Nationalization of Banks by the Obama Administration

• The New York Times reports the government is contemplating converting some of the bailout funds into equity shares of banks.

• The Financial Times published an article today noting the Obama administration is considering changing repayment terms of TARP. The article notes:
  

• banks that had plenty of capital and had demonstrated an ability to raise fresh capital from the market should in principle be able to repay government funds. But the judgment would be made in the context of the wider economic interest. He said the government had three basic tests. It needed first to “make sure the system is stable”. Second, to not create “incentives for more deleveraging which would deepen the recession”. Third, to make sure the system had enough capital to “provide credit to support the recovery”.