U.S. treasury taking equity stakes in a initial group of selected financials. It's being said that this method is being utilized to avoid the stigma that might be associated with a financial coming forth and requesting help. The way the media is reporting this it appears that the initial group chosen by Treasury have no choice in the matter. The names of the companies involved are Goldman Sachs,Morgan Stanley,Bank of America,Citigroup,WellsFargo,Bank of New York/Mellon,Jp Morgan,State Street Bank. Amounts and exact terms may differ. More info later.
Does this mean that all BNYM employees are now federal employees? What will be their GS ratings? Does it mean that Kelly will a GS-29, for example? As a taxpayer (a big one) do I now own BNYM in two ways; its stock and as a US citizen? Is BNYM now subject to open door policies that other tax-payer supported entities are subject to?
What if I'm with a competing finacial institution that was not bailed-out ie the "Nefarious Nine"? Does the $3 billion equity injection constitute an unfair competitive advantage for what was heretofor a failing enterprise?
Inaddition Treasury is putting three billion into State Street Bank. Both BK and STT are bidders for some of the contractual work that FED TARP program will generate as Treasury lines up vendors to lend system support to the program.