Expanding Ownership

What happens when a bank is worthless? The government steps in. Why? Just let it fail. Seriously. Either socialize the entire bank or let it fail. And really the American government wouldn't have to takeover all of it because as it seems other very rich oil exporting Arab governments already pretty much own the bank.

As part of the plan, Citigroup officials hope to persuade private investors that have bought preferred shares -- such as the Government of Singapore Investment Corp., Abu Dhabi Investment Authority and Kuwait Investment Authority -- to follow the government's lead in converting some of those stakes into common stock, according to people familiar with the matter. That would further bolster an obscure but increasingly pivotal measure of banks' capital known as "tangible common equity," or TCE.

Converting stock, as I'm reading it, is supposed to quench fears. Somehow it just doesn't do it for me.