Associated Press Gov't looks to quell nationalization fears

WASHINGTON (AP) -- The U.S. government on Tuesday sought to quell concerns that the administration is moving toward nationalization of the country's ailing financial system, but said it would provide additional support to banks that do not have an adequate buffer to survive in an even worse economy.Federal Deposit Insurance Corp. Chairman Sheila Bair said any additional steps to prop up the banking system will depend in part on a test to determine how the largest banks would fare in a more dire economic condition. Bair said that a "stress test" for some 20 of the largest banks this week will help federal policymakers determine "what type of additional capital investments the government may need to make."

If the test shows that banks need more capital and are unable to raise it privately, then the government might have to act, she said, speaking on CBS's "The Early Show."
She cautioned against rushing to the conclusion that Washington plans to take over the industry, saying, "I think there's ambiguity in the word 'nationalization.' " more...