Nationalizing Banks: What's All the Fuss?

Stop yakking about the U.S. taking over the banks. It did that years ago. But what's next?

Lee Balterman / Time Life Pictures / Getty

Some say bank nationalization began in 1984 when regulators decided that Continental Illinois, then the nation's seventh largest bank, was too big to fail and put the Federal Deposit Insurance Corporation (FDIC) in charge of it.

Our country's banking system was effectively nationalized in October when then Treasury Secretary Hank Paulson called the heads of the nine biggest banks into his office and told them they couldn't leave before agreeing to take billions of dollars of government money and hand over ownership stakes in return.

At least, that's one way of looking at it. You could also say bank nationalization began in 1984 when regulators decided that Continental Illinois, then the nation's seventh largest bank, was too big to fail and put the Federal Deposit Insurance Corporation (FDIC) in charge of it. Or maybe the crucial moment...

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