Crisis Update: RBS lose majority stake to government

Government sources have confirmed that plans have been drawn to take a majority stake in Royal Bank in Scotland and large holdings in Barclays, HBOS and Lloyds TSB under the £500 billion bailout plan to unfreeze the frozen credit markets.

The source reported that government talks were still continuing over the weekend and warned that it is a fast-moving environment.

Following requests for emergency funding the government is expected to invest £12 billion in RBS, £10 billion in HBOS, £7 billion in Lloyds TSB and £3 billion in Barclays.

The government will have almost no option but to nationalize the entire banking sector if analysts’ predictions are correct of a further 20 percent decline in bank shares this coming week.

With markets closed in Japan and the US on Monday, G7 nations including Britain will be fighting strongly to avoid further declines in banking stocks that would have further detrimental affects on the world economy.

Source: Telegraph