Government set to become biggest shareholder in top banks as Japanese weigh bid for Morgan Stanley
THE government will launch the biggest rescue of Britain’s high-street banks tomorrow when the UK’s four biggest institutions ask for a £35 billion financial lifeline.
The unprecedented move will make the government the biggest shareholder in at least two banks.
Royal Bank of Scotland (RBS), which has seen its market value fall to below £12 billion, is to ask ministers to underwrite a £15 billion cash call.
Halifax Bank of Scotland (HBOS), Britain’s biggest provider of mortgages, is seeking up to £10 billion.
Lloyds TSB, which is in the process of acquiring HBOS in a rescue merger, wants £7 billion, while Barclays needs £3 billion.
The scale of the fundraising could lead to trading at the London stock market being suspended. This would give time for the market to digest the impact of the moves.