Call it bailout, take two. With credit markets frozen and the financial system teetering on collapse, Treasury Secretary Henry Paulson has decided to invest $250 billion directly in the nation’s banks in exchange for an ownership stake. It is a bold move for a desperate time. But Mr. Paulson still has to do more to ensure that American taxpayers, whose money he is investing, get the best deal.

The hope is that new capital  along with a government guarantee for new bank debt issued over the next three years  will get the banks lending freely again. The approach  an about-face from Mr. Paulson’s earlier plan to buy up the banks’ bad assets  is more in line with European efforts. Coordination is essential to manage what has clearly become a global financial crisis.

By taking an equity stake, taxpayers could have a better chance of seeing an eventual return on their investment. If the banks do turn around, then the government, as a shareholder, reaps the benefits.

But we are disturbed that Mr. Paulson wants the government to be a passive investor with little say on how these banks are run, despite the billions of dollars at risk.