In the wake of the British government's bailout plan announcement, the suggestion that its plan embodied a superior approach has been voiced. The central idea is that by injecting capital directly into banks, as opposed to just buying their toxic securities, that might get banks to resume lending a bit faster. As if on cue, the Treasury has made it clear that the bailout plan has given it the leeway to also invest directly in troubled securities. There are no real specifics to report. But according to the New York Times, it appears that such investments will be made if banks request them. This is a good idea, one more weapon in the bailout arsenal. But it will be important for regulators to make clear exactly how the outcome will differ from conservatorship.

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