HBOS and RBS to be nationalised

~Chameleon~

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3185120/Financial-crisis-HBOS-and-RBS-to-be-nationalised-in-50-billion-state-intervention.html


HBOS and Royal Bank of Scotland are effectively to be nationalised as the Government seeks to bring the UK banking system under its control to halt the financial crisis.

Money_Grabber13579

~Chameleon~ wrote: »

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3185120/Financial-crisis-HBOS-and-RBS-to-be-nationalised-in-50-billion-state-intervention.html


HBOS and Royal Bank of Scotland are effectively to be nationalised as the Government seeks to bring the UK banking system under its control to halt the financial crisis.

As far as I'm aware, HBOS is still be taken over by Lloyds but at a reduced price. Although both companies are going to borrow money from the bank. Is this still in return for preference shares?

~Chameleon~

I thought the Lloyds deal had fallen through?

I'm just catching up on the news and spotted the above headline in tomorrow's papers on BBC News.

dunstonh

When I read your subject title I thought they were being nationalised. You had me worried. This refers to the part nationalisation involving the Govt taking shares as part of the already known rescue package.

catz1ct

Sounds like RBS might be doing another rights issue.

~Chameleon~

dunstonh wrote: »

When I read your subject title I thought they were being nationalised. You had me worried. This refers to the part nationalisation involving the Govt taking shares as part of the already known rescue package.

Won't they be holding majority share though? What effect will this have on share values?

Money_Grabber13579

The Lloyds deal hasn't fallen through, although it is very close. If HBOS will accept less per share, then it will still happen. From your link, it does look the govt will effectively be nationalising them. Continuing the Labour policy of buy'em dear and sell'em cheap?!

Money_Grabber13579

~Chameleon~ wrote: »

Won't they be holding majority share though? What effect will this have on share values?

It will dilute the shareholding for everyone else so I'd expect the shares will fall sharply tomorrow. Again.

dunstonh

~Chameleon~ wrote: »

Won't they be holding majority share though? What effect will this have on share values?

Its not a full nationalisation though. That would see them follow the way of B&B and Northern Rock. This is part of the way there but the bank will be able to buy them back later on when they have the money again in future.

The share value should drop in theory but because markets tend to work on the basis of future events, the share price could go up. The stability of having a major financial backer in the form of HMG may make shareholders happier. The share price currently doesnt reflect the net asset value anyway at the moment so despite all the shares being issued it may not have a negative effect.

You really cannot call what will happen when periods like this occur.

Alfie_E

Another poster here who was initially worried by the thread’s title. The details are what we knew were coming.

Money_Grabber13579 wrote: »

It will dilute the shareholding for everyone else so I'd expect the shares will fall sharply tomorrow. Again.

The suggestion that trading in bank shares may be suspended for a week is news to me. Is that all bank shares, all UK-owned bank shares or just the ones the government will be taking a stake in tomorrow?

edwinac_2

~Chameleon~ wrote: »

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3185120/Financial-crisis-HBOS-and-RBS-to-be-nationalised-in-50-billion-state-intervention.html

HBOS and Royal Bank of Scotland are effectively to be nationalised as the Government seeks to bring the UK banking system under its control to halt the financial crisis.

Magnificent news. Now do the same with the rest of the banks. Nationalise the whole lot - including the central banks. Put them all through bankruptcy reorganisation. Peel off their worthless, unpayable derivative contracts - the cause of the whole stinking crisis - and dispose of them all.

Return the banks to their chartered role of deposit-takers and issuers of traditional loans. With the eventual aim of floating them back on the markets.

In essence, this is the revival of Roosevelt's Glass-Steagall Act of 1933, and it went down well in Europe...

Daily_Telegraph wrote:

In Europe, the 15 heads of the eurozone countries who met in Paris yesterday agreed in principle to follow Britain’s example and recapitalise their banks but delayed any announcement on specific measures until after Britain’s announcement.

With the banks taken care of, the currency markets needs cleaning up to rid them of parasitic mega-speculators like Soros. The world needs a new Bretton Woods agreement - a return to the pre-1972 era of fixed exchange rates.