Hey everyone, I have a very random question about something that I heard today. Now I can't remember the exact reasoning, and it's bugging the shit out of me. The premise is this: Banks need to keep a certain % of reserves on hand to prevent a bank run. During the recent crisis, banks faced a liquidity crises and thus needed more equity capital. They got that from the government, which decided to become a stock holder (preferred in the case of banks and common in the case of auto manufacturers, I believe). The thing that's tripping me up is this: A speaker said today that bond financing would not have worked, because the money raised would not have been considered capital (something like that?)? From the company's point of view, how is the bond and stock financing different? Couldn't they just use the money that they raise from either a bond or a stock sale? If anyone knows what I'm talking about (apparently I dont), then I'd appreciate your help.