Banks may get bail-out on Monday

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UK banks may receive recapitalisation money from the government as soon as Monday morning.

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[Legal Beagles]

Bank shares 'to be suspended' as Government hammers out £35bn bail-out of RBS and HBO

Banking shares could be suspended tomorrow while the Government agrees a £35billion lifeline for some of Britain's biggest banks. The Treasury and bank chiefs are understood to be locked in talks today.

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Re: Bank shares 'to be suspended' as Government hammers out £35bn bail-out of RBS and

Bank shares set 'to be suspended' as Government hammers out £35bn bail-out of RBS and HBOS


By Andrew Leach and Dan Atkinson
Last updated at 2:08 PM on 12th October 2008

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Rescue: Alistair Darling is locked in talks with bank chiefs over the proposed rescue package

Banking shares could be suspended tomorrow while the Government agrees a £35billion lifeline for some of Britain's biggest banks

The Treasury and bank chiefs are understood to be locked in talks today over a bail-out of several household names.

Royal Bank of Scotland, HBoS, Lloyds TSB and Barclays, whose share prices and balance sheets have been crushed by the credit crunch, are expected to be first in the queue for the cash.
The unprecedented move could see their shares suspended on the London Stock Exchange tomorrow ahead of details of the moves, which could leave taxpayers owning a majority of RBS and HBoS.
Tomorrow offers a window of opportunity to close the London stock market, with New York and Tokyo both shut for public holidays.
The Treasury may also appoint its own representatives to the boards of the country's biggest banks as it begins buying stakes in them over the next few weeks, a government official said.

Policy makers need to consider how to protect taxpayers' interests when taking significant stakes in lenders, the official said.
Bank of England governor Mervyn King has reportedly told the banks to ask for more than they need, meaning their capital position would be strengthened sufficiently to absorb shocks and a long recession.

The support package was flagged by Chancellor Alistair Darling last week when he unveiled a plan to spend up to £50billion of taxpayers’ money buying shares in British banks to help them rebuild their financial position after the turbulence of the last 15 months.

It is thought the Government has considered a variety of ways of injecting cash into ailing banks to boost their financial strength, but has been determined that a co-ordinated approach is used.
Buying preference shares in the companies, which would pay a dividend and rank above ordinary shareholders in any break-up, had been considered the most likely option.