No Nationalization: The Latest Bank Plan

Treasury is leaking to NyPo:

The strategy being bandied about would involve Treasury Secretary Tim Geithner's financial dream team classifying the ailing banking sector into three categories: those that can survive the recession, those that can't and those in between.

The banks seen as likely to fail would be put through a natural unwinding over time and would see their depositary bases seized by regulators and eventually sold off.

Banks that are borderline, meanwhile, could potentially get more capital injected into them, but efforts would be made to avoid a full-fledged nationalization.