Word: bankses
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Though Britain is not part of the group that uses the euro, British Prime Minister Gordon Brown revealed a further pledge of $63 billion to partially nationalize the country's three biggest banks - a follow-through of his earlier approach that inspired the euro-zone plan. Ironically, Brown's quickness...
On Monday, Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and FDIC chairwoman Sheila Bair announced a widely expected effort to inject $250 billion in government funds into the troubled U.S. banking system. The goal: to get banks lending again and keep the economy from grinding to a halt...
The plan calls for Treasury to inject billions of dollars into the banking system. Paulson is requiring the nine biggest lenders in the country - including Bank of America, Citigroup and JPMorgan - to sell $125 billion of preferred shares to the taxpayer and to commit in return to lending out much...
To make this acceptable to taxpayers, Treasury is requiring banks to pay a guaranteed 5% annual dividend on the money they're receiving. That will jump to 9% after five years. That means the banks are still getting cheap money by market standards, but it's not free money.
Treasury has also tried to structure the deal so that banks have an incentive to raise private capital to buy back the shares from the government. Private investors can get the same terms as the government, but not better terms, according to a Treasury official. It's not clear how...