U.S. loath to follow Europe on bank plan - by Landon Thomas
When it comes to formulating an effective strategy for reviving the fortunes of hobbled U.S. banks, the administration of Barack Obama is playing catch-up compared with countries in similar straits in Europe. For all the huge sums of taxpayer money already committed, analysts say, the problem is that it is proving all but impossible to clean up balance sheets, raise lending and bolster capital without being prepared to take some sort of government ownership and control over the most troubled banks.
At a time when the market capitalization of the top U.S. banks is collectively below $500 billion, the International Monetary Fund is estimating that financial write-downs will rise to $2.2 trillion. As a result, a number of analysts contend, the Obama administration will ultimately be compelled to admit that even with recent capital injections, some large banks like Citigroup and Bank of America may well become insolvent.
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