U.S. May Retain Grip on Banks With Warrants After Share Buyback

Bloomberg reports:

The Treasury may retain a stake in many U.S. banks even after they buy back the shares the government currently holds.

The government will continue to hold warrants, attached to every capital injection it has made, even after any share buybacks, Treasury officials said. Banks seeking to escape the government’s grip want to retire the warrants -- which give the right to buy stock in the future at a preset price -- at the same time they acquire the government-owned preferred shares.

The officials said the U.S. would give up the warrants only after subsequent talks with appraisers and the banks to agree on a price. As long as the warrants remain, lenders would continue to face some federal constraints, including limits on hiring non-American citizens, the officials said. Lenders would be freed of restrictions on executive pay and dividends, they said.

Great moments in national socialism.