From Bloomberg:
- Treasury Secretary Henry Paulson is preparing to take stakes in a number of regional U.S. banks as he seeks to halt the freeze of credit to businesses and households. The plans may announce as soon as today. The purchases would be the second round in a $250 billion program to inject capital into financial companies, after an initial $125 billion was allocated to nine of the largest banks.
The decision to buy stakes in more lenders comes after some of the mid-sized American financial institutions report mounting losses.
National City Corp., Ohio's largest lender, Oct. 21 posted a wider third-quarter net loss widened to $729 million, from $19 million a year earlier.
SunTrust Banks Inc., Georgia's largest lender, posted a 26 percent decline in third-quarter profit yesterday. The bank's board authorized the sale of $1.6 billion to $4.9 billion in preferred shares to the U.S. Treasury.
Paulson's focus on injecting funds into banks is a shift away from his initial emphasis on unclogging balance sheets by purchasing troubled mortgage-backed assets from financial institutions. Last week, the Treasury agreed to take stakes in nine firms including Citigroup Inc., Morgan Stanley and Bank of America Corp.
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