Dodd Says Short-Term Bank Nationalization Might Be Necessary

By Alison Vekshin

Feb. 20 (Bloomberg) -- Senate Banking Committee Chairman Christopher Dodd said it may be necessary to nationalize some banks for a short time as Citigroup Inc. and Bank of America Corp. tumbled today on concern the U.S. may take over both banks.

“I don’t welcome that at all, but I could see how it’s possible it may happen,” Dodd said in an interview on Bloomberg Television’s “Political Capital with Al Hunt” to be broadcast later today. “I’m concerned that we may end up having to do that, at least for a short time.”

New York-based Citigroup and Charlotte, North Carolina-based Bank of America, which have received $90 billion in U.S. aid in the past four months, fell as much as 19 percent today.

Dodd, who wrote a provision to limit executive pay for executives at companies receiving government aid, said the Treasury Department has “an awful lot of leeway” to administer the restrictions. It was included in the $787 billion stimulus legislation President Barack Obama signed into law this week.