I think the British method is more sound than the U.S. one. Using government dollars to buy preferred shares sounds like it has a better chance at success than the U.S. buying "toxic investments" and letting the banks move blithely forward without that nasty baggage that the government will spend a lot of money managing and probably not get a lot of value back from it. It's the stinking waste left behind by mortgage brokers and bond bundlers. The British are letting the banks sort out their own mess this way, and they have a vested interest in making those mortgage (or whatever) transactions work, even if they have to be modified. The U.S. banks will have no such motivation if their mess is just magicked away.

SRS