Treasury to Invest in Regional Banks: Report

Treasury Secretary Henry Paulson is preparing to take stakes in a number of regional U.S. banks and may announce the plans as soon as Friday, Bloomberg reports.

The purchases would be the second round in a $250 billion program to inject capital into financial companies, after an initial $125 billion was allocated to nine of the largest U.S. banks, including Citigroup(C Quote) and Bank of America(BAC Quote). Paulson is seeking to halt the freeze of credit to businesses and households.

"We're going to give them initial indications very quickly,'' Neel Kashkari, the interim Treasury assistant secretary running the department's financial-rescue office, told lawmakers Thursday, referring to the next group of banks to get government stakes, Bloomberg reports. "It will be a few weeks before the next batch are actually funded,'' he told the Senate Banking Committee.

The decision to buy stakes in more lenders comes after some regional banks reported wider losses. National City(NCC Quote) and SunTrust (STI Quote) posted large third-quarter earnings declines this week.