Nationalisation of UK Banks - Good Or Bad?
There are fears in the US and UK that a number of banks will soon be nationalised by the respective governments in an attempt to stop the financial free-fall that is affecting the world. The US has announced that it is a long way from even considering nationalisation, and while the UK has QQ0-300 stated that they are doing everything that they can to avoid nationalisation, the public perception is that nationalisation is inevitable.
John McFall, a legislator in the Labour Party and Jon Moulton, head of the private equity firm Alchemy Partners wrote a joint column in the Financial Times in which they called on the UK government to nationalise the Royal Bank of Scotland and Lloyds Banking Group. According to the duo, it would be better to get nationalisation over with sooner rather than later, especially as so many people already expect it. They call it a "least worse course" of action, because even though HD0-100 no one really wants it, and it hasn't worked well in the past, in this instance it would push start the flow of credit and allow the banks to "sort out their toxic assets in an unrushed and orderly process".
With both of the bank bailout plans implemented by the British government, it now owns a considerable portion of both the Royal Bank of Scotland (70%) and Lloyds Banking Group (43%), but neither are keen to see that portion rise. Cnbc.com reports on an announcement by RBS to the effect that the only time that nationalisation came up in talks with the government was as something that everyone wants to avoid. Paul Myners, British Treasury Minister has said that the government is lending support only to ensure that the commercial banking sector is once again effective. He added that the goal is to "... support the economy by removing the barriers of lending ..."
Unfortunately, according to an article by Antonia Oprita (CNBC.com), Simon Adamson, banking analyst as CreditSights says, "The main problem is that the various initiatives taken by the government have been positive in terms of preventing a financial meltdown and positive for creditors, but they've been negative for QQ0-100 shareholders. The fear is that more capital will be needed and nationalisation may be needed for one or more banks." All in all, Adamson says that the market is in fact pushing the government towards nationalisation, and that as a result, the fears of nationalisation may become a self-fulfilling prophecy.
John McFall, a legislator in the Labour Party and Jon Moulton, head of the private equity firm Alchemy Partners wrote a joint column in the Financial Times in which they called on the UK government to nationalise the Royal Bank of Scotland and Lloyds Banking Group. According to the duo, it would be better to get nationalisation over with sooner rather than later, especially as so many people already expect it. They call it a "least worse course" of action, because even though HD0-100 no one really wants it, and it hasn't worked well in the past, in this instance it would push start the flow of credit and allow the banks to "sort out their toxic assets in an unrushed and orderly process".
With both of the bank bailout plans implemented by the British government, it now owns a considerable portion of both the Royal Bank of Scotland (70%) and Lloyds Banking Group (43%), but neither are keen to see that portion rise. Cnbc.com reports on an announcement by RBS to the effect that the only time that nationalisation came up in talks with the government was as something that everyone wants to avoid. Paul Myners, British Treasury Minister has said that the government is lending support only to ensure that the commercial banking sector is once again effective. He added that the goal is to "... support the economy by removing the barriers of lending ..."
Unfortunately, according to an article by Antonia Oprita (CNBC.com), Simon Adamson, banking analyst as CreditSights says, "The main problem is that the various initiatives taken by the government have been positive in terms of preventing a financial meltdown and positive for creditors, but they've been negative for QQ0-100 shareholders. The fear is that more capital will be needed and nationalisation may be needed for one or more banks." All in all, Adamson says that the market is in fact pushing the government towards nationalisation, and that as a result, the fears of nationalisation may become a self-fulfilling prophecy.
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