Ellen Seidman, a former OTS director who is now the director of the New America Foundation's Financial Services and Education Project, said the agencies' options for helping banks whose capital levels are imperiled include requiring the suspension of dividend payments, working to restructure banks' balance sheets, and, "in extreme scenarios, engineering a merger."

She stressed, though, that current law gives banks and thrifts significant time "to raise capital or do whatever is necessary to get themselves back into position."
One challenge in determining the rescue's impact on preferred shareholders' capital is that many of the shareholders are privately held banks and thrifts that do not disclose their holdings. LINK (subscription required)