Treasury says banks should stay privately owned

WASHINGTON (Reuters) -The Treasury Department late Friday sought to shoot down persistent rumors Citibank and Bank of America are about to become wholly owned subsidiaries of Uncle Sam.

"There are a lot of rumors in the market, as always, but you should not regard these as any indication of the policy of this administration. As Secretary (Timothy) Geithner has said, we will preserve a financial system that is owned and managed by the private sector," Treasury spokesman Isaac Baker said in a prepared statement.

The statement followed comments from White House Press Secretary Robert Gibbs, who told reporters earlier in the day that President Barack Obama continues to believe "a privately held banking system is the correct way to go."

(Reporting by Corbett B. Daly and David Lawder. Editing by Dan Grebler)