WASHINGTON — Chief executives of the nation’s biggest financial institutions are accustomed to frequenting the marbled corridors and storied rooms of the Treasury Department, yet few of their meetings there could carry the historic weight of Monday’s talks with government officials.
Treasury Secretary Henry Paulson summoned the CEOs from the five largest banks for face-to-face discussions on details of the government’s $700 billion financial-rescue package. The plan has rapidly expanded in recent days from buying up distressed mortgage-related debt from banks to also include the government taking partial ownership in banks themselves — a radical departure for the free-market Bush administration.
“It certainly is a momentous intervention,” said Henry J. Aaron, a senior fellow at the Brookings Institution, quickly adding that few expect the government’s ownership to remain over an extended period.
Yet from the bankers’ perspective, there could be anxiety over how much control the government may wield in return for its capital injection into struggling financial institutions.
