TEXT OF INTERVIEW

Bob Moon: Look, we'd like to write the ending to this story -- preferably a happy one -- as much as you'd like to hear us tell it. But we haven't even reached the page that actually defines what form nationalization -- if it's deemed necessary -- might take.

Consider the comment a Marketplace listener posted to our Web site. He argues the model for this type of recovery has been used successfully since the 1930s to "take over -- not nationalize -- bad banks."

OK, so what's the difference between a takeover and nationalization?

Josh Rosner is on the line from New York. He's managing director at the research firm Graham Fisher. Hi, Mr. Rosner.

ROSNER: Hi. How are you?

MOON: Great, thanks. So, when we talk about some banks seemingly moving closer to nationalization, I think the image that a lot of people get is of some Latin American despot taking over some industry. What would nationalization mean in your eyes?

ROSNER: Well, look, I mean, it certainly can be anything from that to something a lot more benign. I would argue and point out that the FDIC nationalizes banks on a regular basis. Actually, it's increasingly seeming like Thursdays and Fridays are nationalization days, where they essentially go in and they take over the depository institution -- either from an open-market save, where they strip out the bad assets and find a strategic buyer for the good ones; or by taking over the institution, winding it down, working off the obligations, and then selling the healthy assets to the living.

MOON: Do we need to be careful about the terminology that we're using here? Is it nationalization, or is it something else?

ROSNER: Well, no, I think that it's actually resolving. I think it's the resolution. I don't think that it's nationalization. It's essentially restructuring. And you gotta remember, I mean . . . One might argue that that's the process that happens everytime there's a bankruptcy of an institution in this country.

MOON: Temporary receivership, perhaps?

ROSNER: Exactly right. Or conservatorship. Or something to that end. What we have now is actually, really, the half-dead.

MOON: Now, does this get into a question of semantics here, because in the case of Citigroup, for example, we're talking about the government buying more Citigroup stock. That, in essence, is a percentage of nationalization, is it not?

ROSNER: The approach that we're hearing is, frankly, a neither/nor. I don't think it's going to be very effective by way of an approach. I don't think it ultimately will resolve anything. And, ironically, it seems unlikely that even if we did end up with, let's say, the 40 percent ownership of Citi that is rumored, the government would probably not vote its shares. I would think that actually we really at some point need to stop treating the equity holders like there's any value because I think when all is said and done there isn't really any equity value in this company left.

MOON: Now, is this the problem in the stock market right now -- that a lot of people don't know just how far the government intends to go here?

ROSNER: I think that's THE problem. I think, frankly, the government has cast itself in a very dangerous position where it's made, you know, implicit promises to various classes of investors, leading those investors to believe that there are lines that the government won't cross. And at the end of the day, I think that's driven us to actually treat, as example, all banks as though they've got the same problems. If you don't draw the line in the sand between healthy and unhealthy, living and dead, then, frankly, investors really don't know how to invest. And, unfortunately, that is where we are today.

Now, I think it's also, by the way, very important that we get this message out. That we need to make sure that people who have their money in these banks understand that, even if the banks were "nationalized," taken over, put in receivership, that the depositors are actually OK. And so, you know, part of I think what's a responsible approach at this point, is for depositors -- people who actually have accounts at these banks -- to not worry about their money, unless they are over that $250,000 limit. Depositors need to actually understand that they're helping the situation if they are under the FDIC limits and leave their money where it is. They'll be OK.

MOON: Josh Rosner is managing director at the research firm Graham Fisher. Thanks for joining us.

ROSNER: Thank you.