Bernanke again spurns talk of bank nationalization

February 25, 2009 12:00:00 AM PST
Federal Reserve Chairman Ben Bernanke is again spurning speculation that the government may nationalize Citigroup or other big banks. When asked about Citigroup by the House Financial Services Committee, Bernanke said nationalization "is when the government seizes the bank and zeros out its shareholders ... we don't plan anything like that."

But Bernanke says it is possible the government could end up with a much bigger ownership stake in Citigroup or other banks.

In the case of Citigroup, Bernanke said "we'll see how their test works out and what evolves." He was referring to new "stress tests" that regulators will start conducting on the biggest banks to judge whether they can hold up if the recession were to worsen.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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