Financial crisis: Government to take majority stake in RBS

[FarCenter]

Banking shares across the G7 nations could be suspended tomorrow as Government prepares to take a £35bn equity stake in four of the UK’s high street banks.

By Edmund Conway in Washington, Philip Aldrick, Mark Kleinman, Alistair Osborne in London -- Last Updated: 12:16PM BST 12 Oct 2008

Treasury sources confirmed that the Government had drawn up plans to take on a majority stake in Royal Bank of Scotland and big holdings in Lloyds TSB, HBOS and Barclays under its £500bn plan to bail out the banking industry.

Talks were continuing this weekend, added the source, warning that it was a fast-moving environment.

The Government is expected to invest £12bn in RBS, £10bn in HBOS, £7bn in Lloyds TSB and £3bn in Barclays, following request for the emergency funding from the banks.

Analysts believe a further 20 per cent fall in bank shares this week would leave the Government with little option but to nationalise virtually the entire sector.

With markets in the US and Japan closed on Monday, Britain and the other G7 nations are determined to avoid further slumps in banking stocks that could compound the global contagion.

The developments emerged as the International Monetary Fund warned global equities could plunge by a further 20 per cent in the coming days unless governments deliver concrete action to address the crisis.

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http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3182806/Financial-crisis-Government-to-take-majority-stake-in-RBS.html

[jimshoes]

1. Shouldn't someone or several someone's be

getting their neck stretched for getting the banking industry in this mess?

[FarCenter]

2. Angelo Mozillo and Richard Fuld would be a good start

[muriel_volestrangler]

3. Market capitalisations for those on Friday:

RBS £11.9 billion

HBOS £6.7 billion

Lloyds TSB £11.3 billion

Barclays £17.4 billion

So that looks like a majority stake in HBOS too; and a very large one in Lloyds TSB (assuming the merger between those 2 doesn't go ahead after all, since hte government stake for them has been given separately).