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Treasury Secretary Tim Geithner said that he likely will not ban one of the key financial instruments that led to the collapse of AIG and a number of other institutions. "My own sense is that banning naked default swaps isn't necessary and wouldn't help fundamentally in this case," Geithner told Rep. Joe Donnelly (D-Ind.) when asked about the value of the instrument. Credit default swaps were insurance policies offered by AIG and other companies on bundles of toxic assets, allowed under the assumption that increasing property values would fuel increased value for mortgages. Under those assumptions, the credit default swaps...

This is a rush transcript from "On the Record ," March 23, 2009. This copy may not be in its final form and may be updated. GRETA VAN SUSTEREN, FOX NEWS HOST: Joining us live is Republican senator Lindsey Graham. Senator Graham, the question was put to President Obama whether or not Secretary Geithner should go. He says no. Should he go or not stay? SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Well, I -- it'd be up to the president. Right now, no one's going to go as long as someone doesn't have to pay a price. But if there...

The Federal Deposit Insurance Corporation (FDIC) approved the payout of the insured deposits of FirstCity Bank, Stockbridge, Georgia. The bank was closed today by the Georgia Department of Banking and Finance, which appointed the FDIC as receiver. The FDIC will provide payment to insured depositors by mailing checks for their insured funds on Monday morning. Direct deposits from the federal government, such as Social Security and Veterans' payments, will be transferred to SunTrust Bank (for the specific SunTrust branches, depositors should call the toll-free telephone number below). Customers of FirstCity Bank with brokered deposits should contact their brokers about the...

Colorado National Bank, Colorado Springs, Colorado, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Herring Bank, Amarillo, Texas, to assume all of the deposits of Colorado National. The four offices of Colorado National will reopen as branches of Herring Bank on Saturday. Depositors of Colorado National will automatically become depositors of Herring Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their...

eambank, National Association, Paola, Kansas, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Great Southern Bank, Springfield, Missouri, to assume all of the deposits of Teambank. The 17 offices of Teambank will reopen as branches of Great Southern Bank on Saturday. Depositors of Teambank will automatically become depositors of Great Southern Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking...

In the latest dramatic move by federal authorities to prop up the nation's banking system, regulators late Friday seized control of the two largest wholesale credit unions in the U.S. after finding that their losses on mortgage-related securities were even larger than previously thought.

LOS ANGELES – Federal Deposit Insurance Corp. said late Thursday it completed the sale of IndyMac Federal Bank, one of the largest casualties of the housing bust, to OneWest Bank. Pasadena, Calif.-based OneWest, a federal savings bank formed by an investor group that includes billionaire George Soros and Dell Inc. founder Michael Dell, agreed last December to purchase the failed California lender for $13.9 billion. OneWest will assume all deposits of IndyMac's 33 branches, which will reopen as branches of OneWest on Friday, with deposits continuing to be insured by the FDIC. As of Jan. 31, IndyMac had total assets...

WASHINGTON (AP) — Lower tax revenue and massive government spending on the bank bailout pushed the federal deficit to $765 billion in the first five months of the budget year, well on its way to hitting the Obama administration's projection of a record annual imbalance of $1.75 trillion. The Treasury Department also said Wednesday that the February deficit reached $192.8 billion. That's a record for the month and up 10 percent from a year ago, but below analysts' expectations of $205.7 billion.

Prominent banking analyst Meredith Whitney warned that "credit cards are the next credit crunch," as contracting credit lines will lower consumer spending and hurt the U.S. economy. "Few doubt the importance of consumer spending to the U.S. economy and its multiplier effect on the global economy, but what is underappreciated is the role of credit-card availability in that spending," Whitney wrote in the Wall Street Journal. She said though credit was extended "too freely over the past 15 years" and rationalization of lending is unavoidable, what needs to be avoided was "taking credit away from people who have the ability...

WASHINGTON (Reuters) - U.S. policymakers must develop a way to handle the failure of a systemically important, financial conglomerate, possibly modeled after the Federal Deposit Insurance Corp's procedure for smaller banks, Federal Reserve Chairman Ben Bernanke said on Tuesday. The FDIC has hinted it could take on that job, with Chairman Sheila Bair saying recently that the agency's model for failed banks works well. But she said the FDIC would need more authority and resources to resolve financial conglomerates. The FDIC insures about $4.5 trillion of deposits at more than 8,000 banks. It has the authority to take over an...

More than $9 trillion -- in taxpayer dollars -- has been pledged, committed, lent or spent by the federal government in response to the economic crisis. Some say that if the economy continues to deteriorate, trillions more might be necessary to prevent another Great Depression. Yet no one has investigated how this crisis happened. That is irresponsible. A comprehensive investigation is essential to prevent this from happening again.

Sen. John McCain said the Obama administration should've let General Motors fold, rather than keeping it on life support. General Motors should hand over the factory keys to a bankruptcy court, two top Republicans said Sunday. Sen. John McCain, R-Ariz., said the best thing for the ailing automaker to do would be to go into Chapter 11 to reorganize some of its business agreements and come out stronger than before. "I think the best thing that could probably happen to General Motors, in my view, is they go into Chapter 11, they reorganize, they renegotiate ... the union-management contracts and...

Citigroup stock drops below $1 a share, relaxed NYSE rule allows continued trading.CHARLOTTE, N.C. (AP) -- Shares of Citigroup Inc., once the nation's most powerful bank, fell below $1 a share Thursday. The stock fell as low as 97 cents in late morning trading. It was down 11 cents, or 9.7 percent, at $1.02 in mid-afternoon. New York-based Citi has lost more than 85 percent of its value so far this year, and is down more than 95 percent from a year ago as the bank was pummeled by the financial market crisis. Citigroup's shares will remain on the New...

BY KEVIN KINGSBURY AND MAYA JACKSON RANDALL Struggling banking giant Citigroup Inc., moving aggressively to shore up its equity base, announced a stock swap Friday that if successful will leave the government owning more than a third of the company and wipe out nearly three-quarters of existing shareholders' stake. The move is an acknowledgment that more than $50 billion in government capital and a backstop on more than $300 billion in troubled Citigroup assets haven't been enough to stop the bank's slide. It also represents a deepening of the government's role in trying to prop up the U.S. banking sector....

Sen. Lindsey Graham, who made a political splash by speaking in favor of bank nationalization, said this week that Charlotte-based Bank of America Corp. "has a very positive outlook." That's a change from last week, when Graham said in an interview with the Observer that he doubted whether Bank of America would ever repay its $45 billion capital infusion from the government's Troubled Asset Relief Program, or TARP. Graham has advocated that the government temporarily take over some of the banks that fail the Treasury's so-called "stress test," and he hinted in the Observer interview that Bank of America could...

For two centuries, Wall Street survived wars, depressions, bank panics and terrorist attacks. Now Wall Street as we know it is dead. Gone. When a healthy and thriving person dies suddenly, a medical examiner may talk to family and friends to see if the deceased had recently changed behavior in some way. Wall Street did change radically in recent years in one notable way. Twenty or 30 years ago, it was common for the best and the brightest to be doctors or engineers. By the 2000s, they wanted to be investment bankers. When Wall Street was run by people randomly...

First, Arthur Santa-Maria called Bank of America to ask how to check the balance of his new unemployment benefits debit card. The bank charged him 50 cents. He chose not to complain. That would have cost another 50 cents. So he took out some of the money and then decided to pull out the rest. But that made two withdrawals on the same day, and that was $1.50. For hundreds of thousands of workers losing their jobs during the recession, there's a new twist to their financial pain: Even when they're collecting unemployment benefits, they're paying the bank just to...

More than 100 members of Congress—past and present—as well as congressional campaign committees and the national parties benefited from political donations from the political action committee or employees of Stanford Financial Group since 2000, according to the Center for Responsive Politics. The Securities and Exchange Commission charged the firm’s head, R. Allen Stanford, on Tuesday with orchestrating a $8 billion fraud. Tuesday’s Wall Street Journal reported on Stanford’s status as an “international cricket sponsor, Washington political donor and private banker to Latin America’s wealthy.” President Barack Obama was the third-ranking recipient among lawmakers, with $31,750 collected from company employees during...

One of Washington's time honored rituals is that when a donor turns out to be a sleaze ball, or even an alleged sleaze ball, beneficiaries distance themselves -typically by donating the amount received by their campaign committees to charity. The disgorging has begun when it comes to R. Allen Stanford, the Houston-based banker who - according to the SEC - ran a fraudulent $8 billion investment scheme out of his office on the Caribbean island Antigua. Sen. John McCain of Arizona was the first major recipient to step forward. An aide said this morning that he will donate his receipts...

BY KRISHNA GUHA & EDWARD LUCE Washington. The US government may have to nationalise some banks on a temporary basis to fix the financial system and restore the flow of credit, Alan Greenspan, the former Federal Reserve chairman has told the Financial Times. In an interview with the FT Mr Greenspan, who for decades was regarded as the high priest of laisser-faire capitalism, said nationalisation could be the least bad option left for policymakers. ”It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring,” he said. “I understand that once in a...