A government takeover of banks would be a "surprising" move given that large U.S. banks are not in danger, FDIC Chairperson Sheila Bair said on Tuesday.

Speaking in an interview on the CBS Early Show, Bair admitted that there were ongoing tensions in the financial system and called for stress testing the financial system to determine the capital needs of institutions

She also said the creation of a so-called "aggregator bank" was in the cards for the near future but warned that, given current conditions in the United States, a quick fix is not going to happen.

The comments come at a time when confidence in U.S financial institutions is at a record low as fears of government takeovers run rampant.

On Tuesday, reports suggested that bailed-out insurance giant American International Group is seeking to ease the terms of its bailout by restructuring its debt to the government and Federal Reserve.

By Erik Kevin Franco and edited by Stephen Huebl
©CEP News Ltd. 2009