Banking Sector News: U.S. Bank Nationalization?

Right now, one of the rumours swirling about the banking sector is that the U.S. might start engaging in bank nationalization. Even as leaders make noises about the importance of a privately-owned banking sector in the U.S., speculation continues. Even a memo released by Bank of America hasn’t really done much to stymie the thoughts that bank nationalization is an option in the U.S.

And it is an option. Bank nationalization hasn’t been ruled out. With the introduction of a stress test for banks, it is thought that bank nationalization — most likely through some process of government-owned stocks in the banks at the greatest risk — might not be far behind.

Economic recovery on the horizon

In addition to rumours of possible bank nationalization, news is also focusing on Ben Bernanke’s testimony before the Senate banking committee. He didn’t offer anything particularly new, but did indicate that he is hopeful that an economic recovery can start in the U.S. by the end of 2009 or the beginning of 2010.

Of course, economic recovery depends upon the success of economic stimulus measures that are about to be put into practice by the government. Banking plans, job creation, tax cuts and the foreclosure prevention plan are all factors that might contribute to an economic recovery. Of course, if things do not turn out as expected, recovery could still be a long way off.

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• Citigroup Moves Closer to Nationalization (gothamist.com)
• Hesitating to Accept the Inevitable (delawarewatch.blogspot.com)
• Why not nationalise? (economist.com)