BANK NATIONALIZATION - VOLUNTARY OR NOT?

There's some disagreement about whether the new plan to directly invest in banks is mandatory or voluntary.

Bloomberg, 10/14/08:

None of the nine banks getting government money was given a choice about it, said people familiar with the plans.

CNBC, 10/13/08:

Speaking before a banking group, the head of the Treasury's $700 billion financial rescue program, Neel Kashkari, disclosed a few details about the plan officials were constructing.

"We are designing a standardized program to purchase equity in a broad array of financial institutions,'' Kashkari told a banking group.

"As with the other programs, the equity purchase program will be voluntary and designed with attractive terms to encourage participation from healthy institutions. It will also encourage firms to raise new private capital to complement public capital,'' he added.

AP, 10/14/08:

President Bush was scheduled to announce the new initiatives early Tuesday after executives of the country's biggest banks were summoned to a remarkable meeting at the Treasury Department on Monday. Treasury Secretary Henry Paulson basically told the bank CEOs that they had to accept the government stock purchases for the good of the U.S. economy.

WSJ, 10/14/08:

Some of the big banks were unhappy about the government taking equity stakes, but acquiesced under pressure from Treasury Secretary Henry Paulson in a meeting Monday.