WASHINGTON (AFP) — Nine of the largest US banks agreed to give the government equity stakes in exchange for capital under a rescue plan, including Citigroup, JPMorgan Chase and Bank of America, a Treasury official said Tuesday.
The other major banks in the program include Goldman Sachs, Morgan Stanley, Wells Fargo, Bank of New York Mellon, State Street and Merrill Lynch, soon to be taken over by Bank of America, the official said.
These nine will get 125 billion of the 250 billion dollars to be invested by the government in the banks as part of a massive rescue of the financial system.
The remaining 125 billion will go to smaller banks and lenders which agree to the program of capital for equity which includes limits on executive compensation.
Bank of New York Mellon confirmed in a statement that it will be part of the initial group of nine, with the Treasury investing three billion dollars in preferred stock and warrants.
"These investments are a sign of the US government's determination to work in partnership with other governments to create an environment of confidence," said Robert Kelly, chairman and chief executive officer of the group.
"Our company continues to be a leader in tumultuous times. We are supportive of the Treasury's efforts. It is time to get the markets working again for borrowers and investors."
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