The United States Treasury Department was reported on Monday as considering taking ownership stakes in many American banks in order to restore confidence in the financial markets.

U.S. Congress approved a bailout bill last week Friday, but this did not have the effect lawmakers and government officials hoped. 

On the other hand, the bill does, Treasury Department officials believe, authorize them to inject millions of dollars into U.S. banks. ‘Such a move would quickly strengthen banks’ balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones,’ the New York Times explained in a report published Thursday.

At this moment it seems that banks would have to agree to the injection and partial nationalization. It will be on a voluntary basis, or that is at least what officials consider most likely at this point.

Wall Street and the White House both believe that recapitalization will solve the main problem existing in the financial markets today: banks refusing to lend each other and other customers money. If the government would be involved, and would take care of the risks, this could change dramatically, meaning that it will be more likely that banks will start lending to each other once again.

There is, however, an obvious risk involved. Banks refuse to lend to each other because they are unsure about the stability of competitors and about the state of the economy in general. If the government is the one taking all the risk, it could end up suffering tremendous losses which will have to be covered by tax payers money.

Yesterday, central banks worldwide cut interest rates. Although this did not have a positive result immediately, European stock markets picked themselves up one day later, today. Only the Swedish stock market fell on Thursday, all the other European markets were in the green.

As such, one cannot help but wonder whether the U.S. government is patient enough to see the benefits of its policies take shape. The bailout plan was accepted less than a week ago, interest rates were cut only yesterday. It takes time for such measures to have an impact.