The Department of the Treasury has begun to purchase stakes in several regional banks as the government aims to halt the freeze of the credit markets, according to a Bloomberg report.
The report, which cited a person who was briefed on the matter, said that the Treasury Department may announce the plan as soon as today.
The plan would be the second round of a $250 billion plan to inject equity into the financial system.
A call to the Treasury Department wasn’t immediately returned.
An initial $125 billion was allocated to nine of the largest banks including Bank of New York Mellon Corp., Citigroup Inc., The Goldman Sachs Group Inc., JPMorgan Chase & Co., Merrill Lynch & Co. Inc. and Morgan Stanley, all of New York; Bank of America Corp. of Charlotte, N.C., State Street Corp. of Boston and Wells Fargo & Co. of San Francisco.
The funds come from the government's $700 billion bailout plan, which was passed Oct. 3, and follows moves by European governments to make equity investments in banks.
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