Paulson Urges Banks to 'Deploy' Capital

Treasury Secretary Henry Paulson is urging banks that plan to take part in the government capital initiative to "deploy, not hoard" their capital.

Paulson made the comments during a short prepared speech to address the standardized application process for banks looking to participate in the equity capital purchase program formally announced last week. The Treasury plans to invest up to $250 billion in the U.S. banking sector by purchasing preferred stock and warrants as part of the troubled asset relief program, or TARP.

"While many banks have suffered significant losses during this period of market turmoil, many others have plenty of capital to get through this period, but are not positioned to lend as widely as is necessary to support our economy," Paulson said on Monday in prepared remarks. ...