Thursday, October 30, 2008

The Bailout Bandwagon gets crowded

Why should small banks be excluded from this gravy train? Do you really think members of Congress will miss this opportunity to extend their butts for kissing and their hands for political contributions to small banks and anyone else who wants some taxpayer lucre.


The government's offer to buy shares in the country's financial firms sounds enticing to many of the Charlotte area's community banks.

It's the cheapest way to raise capital right now, they say, and the stigma originally associated with the plan – which has morphed in the public's vernacular from “bailout bill” to “capital injection” – has largely disappeared.

Kim Price, who is chief executive of Gastonia's Citizens South Banking Corp. and chairman of the N.C. Bankers Association, estimated Wednesday that 70-80 percent of the state's roughly 125 banks will apply for the program, which allows the federal government to directly purchase preferred shares in the banks.