April, 2009

Implications and Analysis of Government Shareholding in the Financial Sector

Key materials
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The federal government's new position as the dominant shareholder in the financial services sector requires careful consideration of its shareholder rights vis-à-vis its position as a unique entity in the corporate realm. Federal authorities will need to examine interaction with current statutes and potential conflicts of interest to ensure efficient outcomes and avoid unintended consequences in capital markets. Doing so may involve a number of changes to current provisions, however a failure to plan for the management of the governments shareholder's rights could have drastic consequences for the nation's economy. This Mercatus on Policy analyzes the legal implications arising from the current Troubled Asset Relief Program's shareholding arrangement.