The British government will launch the largest bank rescue operation on Monday, when the four largest commercial banks – HBOS, Royal Bank of Scotland, Lloyds TSB, and Barclays – will officially request assistance amounting to £35 billion ($60.5 billion), reported the Sunday Times.
Following this unprecedented move, the British government will become the largest shareholder in at least two banks – HBOS and Royal Bank of Scotland, the newspaper reported on its website, without citing the source of this information. The Sunday Times writes that the Royal Bank of Scotland, whose market value has fallen below £12 billion, has requested £15 billion in cash from the government.
HBOS, the largest British mortgage lender, has requested £10 billion, Lloyds TSB, which is in the process of acquiring HBOS to save it from collapse, needs £7 billion, and Barclays requires £3 billion. British Finance Minister Alistair Darling, who is attending a meeting of G7 finance ministers in Washington, stated on Saturday that the British government will announce more details about the £400 billion rescue plan for British banks at the beginning of the week.
The Sunday Times also reports that due to such a large financial intervention, trading on the London Stock Exchange could be suspended on Monday to give investors time to thoroughly consider all of this. (Hina)
