U.S. closer to nationalized banks

WASHINGTON, Jan. 16 (UPI) -- Massive bailouts and a directive from Barack Obama's economic team puts the government on track to take more control of the nation's banks, an analyst said.

"We are down a path that this country has not seen since Andrew Jackson shut down the Second National Bank of the United States," Gerard Cassidy of RBC Capital Markets told The New York Times.

"We are going back to a time when the government controlled the banking system," he said.

President-elect Obama's economic advisers have advised Congress that bailout funds would include terms that give the government more leverage on how the money is spent.

In pure math, bailing out Citigroup Inc. may require funds so large the government would own a controlling share of the bank, the Times reported.

On Thursday, the government announced an additional rescue package for Bank of America worth $138 billion, The Wall Street Journal said. Bank of America had already accepted $25 billion from the $700 billion financial rescue bill passed in October.

Citigroup has accepted government interventions worth $300 billion, the Times said.

"There's nobody else out there to invest in them. We (taxpayers) already own them," Christopher Whalen at Institutional Risk Analytics, said.