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Government Ownership Of Banks: A Curse Or A Blessing For The United States?, Yueh-Ping (Alex) Yang

William & Mary Business Law Review

During the Financial Crisis of 2007–2008, the Treasury injected an enormous amount of capital and held equity in 707 financial institutions to stabilize the U.S. financial system. The government’s large-scale ownership of banks alarmed the U.S. banking sector. The mainstream opinion in the United States strongly opposed this practice, mostly due to the distrust of the government and the fear that government intervention would jeopardize private shareholders’ interests. Later developments, including the Treasury’s quick exit from its holdings and the Dodd-Frank Act’s declaration of the end of bailouts, suggest that the U.S. government eventually succumbed to the mainstream opinion.

Such …