B of A received $20 billion in exchange for preferred shares, and Uncle Sam will backstop losses on some toxic assets above $10 billion. Even with this help, B of A's leadership is not optimistic.
The government (or, we the taxpayers) has taken a huge role in propping up the banks. Whether you agree with the reasons or not, the government has an increasing ownership interest - and therefore leverage - in the banks. Today's New York Times discusses a hint of bank nationalization.
Without rescue funds, banks might fail quickly and clear the way for healthy banks to move forward. However, that process would be painful to say the least.
What do you think about government assistance to the banks? How should we proceed? Tell us about it in the comments.
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