Treasury Cash Lures Banks: Report

Treasury and banking regulators say as many as 1,800 publicly held institutions could apply for government investments in coming weeks, the Wall Street Journal reports.

Depending upon conditions still being crafted by the Treasury Department, thousands more private banks could apply for government capital as well, a Treasury spokeswoman said, the Journal reports.

Many healthy banks said previously they didn't need taxpayer money under the government's Troubled Asset Relief Program. These healthy banks said they worried that taking government investments could unfairly identify them as in need of a bailout. In the past week, that perception has been reversed, due in large part to efforts by Treasury, banking lobbyists and legal advisers to sell the TARP, the newspaper reports.

"There's a perception in the market that the government is actively picking winners and losers ... we wanted it well-known in the market that we're on the list of survivors," said Roy Whitehead, president and CEO of Washington Federal(WFSL Quote) in Seattle, one of about 20 regional banks approved by Treasury for the program last week, the Journal reports.

A Treasury spokeswoman said planners of the Treasury program anticipated the huge interest, and that the $125 billion remaining for the program after the first nine big banks committed to the funds in October will be enough, according to the Journal.