IE 11 is not supported. For an optimal experience visit our site on another browser.

New York Mellon to sell $3B in shares to govt

Bank of New York Mellon Corp. said Tuesday it will sell $3 billion in preferred shares to the Treasury as part of the government's plan to resuscitate the ailing financial industry.
/ Source: The Associated Press

Bank of New York Mellon Corp. said Tuesday it will sell $3 billion in preferred shares to the Treasury as part of the government's plan to resuscitate the ailing financial industry.

BNY Mellon is one of nine large banks that will be the first to participate in the Treasury's plan to spend up to $250 billion buying stakes in the nation's banks. The goal is to provide enough capital to encourage banks to begin lending again to one another and to businesses.

BNY Mellon Chief Executive Robert Kelly said the move is part of the government's plan to create an "environment of confidence."

"We are supportive of the Treasury's efforts. It is time to get the markets working again for borrowers and investors," he said in a statement.

Not all of the banks participating wanted to take money from the government out of fear that it would indicate they were weak or even failing. But Treasury Secretary Henry Paulson ordered the heads of major banks to take part so as to remove any stigma that may be associated with taking money from the government.

Among the initial banks participating will be all of the country's largest institutions, including Citigroup Inc., Wells Fargo & Co., JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley, said one official, with each institution expected to receive billions of dollars in return for the sale to the government of preferred shares.

BNY Mellon shares rose $3.25, or 11 percent, to $33.97 in afternoon trading. In the past year, the stock has ranged from $20.49 to $50.26.