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Stock prices plunged this morning to an 11-year-low, but managed to rebound at the close -- for a loss of only 100 points.
Citigroup lost more than 20 percent of its stock value Friday closing at less than $2 a share. Bank of America fell too and Wells Fargo lost nine percent.
There seems to be a crisis of confidence in the banks. However, San Francisco-based Wells Fargo is actually one of the nation's stronger banks and its stock was down 31 percent this week.
Some of those talking about government control of banks, carry a lot of clout in congress.
Stocks plummeted and then regained some lost ground after the White House calmed fears that the government might nationalize the most troubled banks.
"On banks, this administration continues to strongly believe that a privately held banking system is the correct way to go," said Robert Gibbs, the White House press secretary.
But nationalization was still on the minds of many guests at the Annual CityBeat Luncheon held by the San Francisco Chamber of Commerce.
"I personally don't think that would be good either for the financial industry or the economy," said Carol Obley, from Bank of the West.
"These are truly unusual and historic times," said John Stumpf, the CEO of Wells Fargo.
Keynote speaker Stumpf never mentioned the subject. He chose instead to explain why his bank took $25 billion in government bailout money.
"The message to the banks was 'This is good for America,'" said Stumpf. "And since we're Americans first and bankers second, we agreed."
Stumpf pointed out that in the fourth quarter the bank lent $72 billion, far more than the $25 billion it got in government bailout money. He said, worse than the credit crunch is the confidence crunch -- a loss of investor faith that the government can stabilize the banks and the economy. Many at the Chamber of Commerce agreed with Stumpf.
"It's just another reminder that this ship is just not yet stable," said Steve Falk, the president of the chamber of commerce.
And, most of those we spoke with were still upbeat.
"Strong institutions like Wells Fargo and others will come back and come back roaring and we'll be just fine," said Lloyd Dean, CEO of Catholic Healthcare West.
Stumpf told the audience Wells Fargo has no plans to take any more government bailout money from TARP, the Trouble Asset Relief Program.
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