Banks see bailout as ticket to expansion

Published: Oct. 22, 2008 at 12:32 PM
Related Company

WASHINGTON, Oct. 22 (UPI) -- Three U.S. banks participating in the $250 billion equity for cash bailout said they might use the money to purchase other firms.

J.P. Morgan Chase, BB&T and Zions Bancorporation have said recently they are considering using the capital raised in the bailout to expand their holdings, The Washington Post reported Wednesday.

U.S. Treasury Secretary Henry Paulson Jr. told the Post in an interview Tuesday that the goal of the program was to "have our … healthy banks be well-capitalized."

But, he said, "there will be some situations where it's best for the economy and for the banking system for there to be a consolidation."

Advocates for new mergers say purchases could save weaker banks. Large banks also tend to have larger cushions against failure, the Post reported.

Nobel prize-winning economist Joseph Stiglitz said the trend toward larger banks "is a very serious problem."

Part of the program's "exit strategy" should include "breaking up some of the big banks," Stiglitz told members of the U.S. House of Representatives Financial Services Committee.

© 2008 United Press International, Inc. All Rights Reserved.
Order reprints



Additional News Stories
Police: Couple shoplifted for thrill (11 min)
Police review evidence against Bonds's son (11 min)
UPI NewsTrack Sports (14 min)
Group's top judicial hellhole: S. Florida (15 min)
U.S. markets mixed after Fed decision (28 min)
UPI NewsTrack Quirks in the News (28 min)
Bank robbery money returned via mail (29 min)
fark
If you go see Aunt Gladys and see she's unconscious and not breathing, call 9-1-1. If you go see...
Chilliest place in the Solar System ever measured by spacecraft found on the Moon, eclipsing the...
"I voted for medical marijuana, but I didn't expect it to be in my backyard," says dumbass who should...
Man wins lottery, does what most men only dream of doing. Sail away to some tropical island? No,...
"Please have a heart and donate...so I don't have to kill you and put your head on a pike"
Your Christmas tree should be a reflection of your family. Subby wonders what garland goes with...