There's a new wrinkle in the latest round of recapitalizations: The only way for the banks involved to win is for taxpayers to lose.

This was revealed in deals announced this week to shore up the balance sheets of two companies that have warned of their possible demise. Though each deal has multiple strings attached, there is a common thread — the investments hinge on the Treasury Department's converting its preferred shares into common equity at a steep discount.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.