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Treasury to Bank: No Soup for You!

The Treasury Department has not said how it selects which banks qualify for the bailout.For whatever reason, the Treasury Department has denied taxpayer money to “at least one bank” that applied to its capital injection program, the Washington Post reports, citing “industry sources.”

The reason this bank was denied isn’t clear because, as we reported earlier this week, the government hasn’t said how it will select which banks will get billions in taxpayer money. All Treasury officials have said publicly is that the program is for “healthy” banks. The Treasury will reportedly soon announce a new batch of takers: a group of “large regional banks.” As the Post puts it, the move is “meant to show that regional banks are now volunteering to participate and to help jump-start the economy.”

PNC Financial Services is among that group, and has announced that it will get $7.7 billion as part of the program. (For those keeping track at home, that’s $132.7 billion promised so far – eight of the country’s largest banks got a total of $125 billion last week). At the same time, PNC announced that it was gobbling up National City, a smaller struggling regional bank.  The merger will make PNC the nation’s fifth largest bank. Treasury officials announced earlier this week that they hoped the capital infusions would aid takeovers of weak banks.

Meanwhile, the Treasury is reportedly considering another use for the capital injection program: taking equity stakes in insurance companies. It’s “a sign,” the Wall Street Journal reports, “of how the government's $700 billion program has become a potential piggybank for a range of troubled industries.”

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