Obama Considering Converting Current Bank Loans Into Common Shares

Reports from the New York Times, top economic advisers for President Barack Obama are leaning towards shoring up the banking system by converting the government's existing loans into common shares.

By converting the current preferred shares into common share it would boost the available capital for the banks.� Under the move, the government would become the largest shareholder of several banks and some critics would consider it a back door form of nationalization.

The government was already forced to make this kind of conversion with Citigroup (NYSE: C) and has publicly stated they would consider similar moves for other banks, as needed.

Link to NY Times Article

Bank stock to watch on the news:

• Bank of America (NYSE: BAC)


• JP Morgan (NYSE: JPM)


• Wells Farto (NYSE: WFC)
  
• Financial Select Sector SPDR (NYSE: XLF)

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