April 19, 2009 / 3:23 PM / 10 years ago

U.S. can avoid bank nationalizations: White House

The logo over a Citibank branch is pictured in Chicago March 10, 2009. REUTERS/John Gress

WASHINGTON (Reuters) - The Obama administration thinks it can avoid nationalizing U.S. banks that are currently under scrutiny to see how well they would fare if the recession were worse than expected, the White House said on Sunday.

“I think we will be able to avoid that,” White House Chief of Staff Rahm Emanuel said on ABC’s “This Week with George Stephanopoulos.” He added that bank nationalization was “not the goal” of the administration.

Emanuel, however, cautioned he had not seen the results of “stress tests” on 19 lenders whose balance sheets are being scrutinized by regulators. They include Citigroup Inc., Wells Fargo & Co.and Bank of America.

The findings will be used to determine who may need more government capital.

Officials have said they will take care that the test results do not damage the banks’ reputations, but they are expected to give some stark orders on how the banks should rebuild as a result of the financial crisis.

Writing by Paul Simao; Editing by Jackie Frank

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