Lisa Chow is the economics reporter at WNYC. She tries to explore in her stories surprising aspects of New York’s many economies—in plain view or hidden, in neighborhoods or sectors.
New York, NY –
Stock prices of financial bellwethers Citigroup and Bank of America continued to slide today but regained some lost ground after the White House tamped down fears the government would nationalize the banks. Citigroup fell 22 percent, while Bank of America fell 3.6 percent today. Thomas Philippon is a professor at NYU Stern.
PHILIPPON: As long as the plan of the government is not clear, then you have these gigantic swings in the value of the stock, and these big uncertainties, that is very bad.
Philippon says the government can either take control of the banks, and wipe out shareholders in the process, or it can continue injecting capital into the banks, but it should make its plan clear. White House Press Secretary Robert Gibbs said today the Obama administration continues to "strongly believe that a privately held banking system is the correct way to go."