In an effort to restore confidence in the financial system, the Treasury Department is considering partially nationalizing the US banking system by taking ownership stakes in certain banks. Treasury Secretary Henry Paulson said Wednesday the recently approved $700 billion financial bailout bill gives him wide authority to inject capital into the banking system. Earlier this week, Britain announced plans to partially nationalize its banks by spending $87 billion to buy major stakes in eight banks, including Royal Bank of Scotland, HSBC and Barclays. Iceland has already taken control of its three largest banks, bringing virtually the entire Icelandic banking sector under state control.