In a post-AIG bonus world, this kind of description of the Geithner plan could kill it:
Kyle said that the government could pump money into banks through either asset purchases or capital injections, but only capital injections allow taxpayers to share directly in the benefits.
The Obama administration already has embarked on a version of this idea, conducting “stress tests” to determine how much additional capital banks need to weather a further deterioration of the economy. Kyle said he believes that program should be expanded, and the plan announced yesterday should be set aside.
“You have a huge transfer of wealth that’s going from taxpayers to banks,” University of Maryland finance professor Albert Kyle said. “The right way to do that is to inject capital directly into the banks.”






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