Washington, Oct. 25 (AFP): After purchasing shares of leading banks, the US government is considering buying equity stakes in insurance companies using the $700-billion rescue package approved by Congress, The Wall Street Journal reported today.

The newspaper said insurance firms were offering their shares themselves, feeling they could benefit from the government’s money pool amid the financial turmoil. Citing people familiar with the matter, the journal said MetLife, Prudential Financial and New York Life Insurance were keen to sell equity stakes to the government.

Yesterday, PNC Financial Services Group Inc said the treasury department would buy $7.7 billion worth of preferred stock and warrants.

Alpha Bank collapses

In another sign of deepening financial crisis, Stearns Bank will acquire the failed Georgia-based Alpha Bank and Trust, making it the 16th American bank to fall this year.

On Friday, the US authorities seized the operations of Alpha Bank and the Federal Deposit Insurance Corporation (FDIC) was named receiver.

“To protect depositors, the FDIC entered into a purchase and assumption agreement with Stearns Bank, National Association, St Cloud, Minnesota, to assume the insured deposits of Alpha Bank & Trust,” the FDIC said in a statement.

In a separate statement, Stearns Bank’s chief executive Norman C. Skalicky said the current capital position of the bank is about $250 million.

“We have over 23 per cent capital in our banking system today. This is three times the average capital of all commercial banks in the US and four times what is considered being well capitalised,” Skalicky said.

“We are pleased to bring the safety and soundness of Stearns Bank to the former depositors of Alpha Bank & Trust,” he added.