The White House said on Friday it strongly believed in a privately held bank system, after rumors that the U.S. government could nationalize banks caused shares in Bank of America and Citigroup plummet.

Let me reassure as best I can on banks, White House press secretary Robert Gibbs told a briefing with reporters.

This administration continues to strongly believe that a privately held banking system is the correct way to go, ensuring they are regulated sufficiently by this government.

That's been our belief for quite some time and we continue to have that.

The White House spokesman's comments helped lift U.S. stocks from their lows of the day, traders said. The Nasdaq Composite index briefly turned positive, and the Dow Jones industrial average and Standard & Poor's 500 index both cut deep losses.

U.S. government debt prices cut their gains as the move up in equities diminished their safe-haven appeal.

During the briefing, Gibbs was pressed further on whether his comments meant the Obama administration would never nationalize the banks.

I think I was very clear about the system that this country has and will continue to have, he replied.