William K. Black, professor at the University of Missouri-Kansas City School of Law, says "nationalization" is a boogeyman that shouldn't scare the government away from taking complete control of the financial sector.
“It’s insane to leave it in the control of the people who have every incentive to cover up the scale of the losses,” said Black, former lawyer at the Federal Home Loan Bank of San Francisco and Office of Thrift Supervision. “You’re deliberately negotiating a bad deal for the American people by not getting an appropriate return for the risk you’re taking.”
Faced with pressure from lawmakers, banks have shaken up management, eliminated executive bonuses and staff and canceled conventions. They’ll be forced to do monthly reports on how they’ve boosted lending while slashing quarterly dividends to one cent a share for three years.
“When the Treasury tells a bank to pay a penny a share vs. its old dividend, you know who’s calling the shots,” said Jon Bruss, a 40-year industry veteran and founder of Hartland, Wisconsin-based Fortress Partners Capital Management Ltd., which invests in banks. “It may not be de jure nationalization but I think it’s de facto nationalization.”
Citigroup, Bank of America May Look ‘Nationalized’ (Update3)
Bank bailout could cost $4 trillion Fortune money.cnn.com - Jan. 27, 2009
De facto nationalization took place a long time ago.