LONDON, Oct 12 (Reuters) - The British government unveiled on Wednesday a plan to bolster ailing banks and shore up the financial system. [ID:nL8586784]
Following are some key facts on the package.
RECAPITALISATION
The government will spend at least 50 billion pounds ($87.8 billion) buying stakes in UK banks to improve their capital strength. Banks will be able to draw on 25 billion pounds in the form of preference shares or permanent interest bearing shares (PIBS) by the end of the year. The government will also assist in raising ordinary equity if asked to and is ready to provide a minimum of 25 billion pounds of further support.
LIQUIDITY
The Bank of England will make at least 200 billion pounds ($351 billion) in loans available to banks via auctions in order to ensure sufficient liquidity and stability in the banking system. Until markets stabilise, the bank will continue to conduct auctions to lend sterling for three months, and also dollars for one week, against extended collateral.
DEBT
So that banks can refinance and meet refunding obligations the government will, for an interim period, guarantee what it expects to be about 250 billion pounds ($439 billion) worth of new short and medium-term debt issuance by the banks.
WHO BENEFITS?
The banks that have already confirmed their participation in the recapitalisation scheme are Abbey, which is owned by Spain's Santander (SAN.MC: Quote, Profile, Research, Stock Buzz), Barclays (BARC.L: Quote, Profile, Research, Stock Buzz), HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz), HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz), Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz), Nationwide Building Society, Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) and Standard Chartered (STAN.L: Quote, Profile, Research, Stock Buzz). HSBC has said it has no plans to make use of it at present. Other UK financial institutions, including those under foreign ownership, are entitled to apply for membership of the scheme.
(Reporting by Paul Hoskins, editing by Will Waterman)
2008年10月12日星期日
UPDATE 3-UK banks set to unveil bailout plans -source
By Ralph Gowling and Steve Slater
LONDON, Oct 12 (Reuters) - Major British banks are likely to announce their plans to recapitalise early on Monday, a person familiar with the matter said, a move which could see the government take multi-billion pound stakes in several lenders.
Banks are in talks with the government and regulators to determine how much capital each needs from 50 billion pounds ($86 billion) offered by Britain on Wednesday
An announcement is expected before market opens on Monday, said the source who declined to be identified because of sensitivity of the matter.
The Sunday Times said Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz), Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz) and Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) could ask for a combined 35 billion pound lifeline.
That could result in the government becoming the biggest shareholder -- and even a majority investor -- in RBS and HBOS. It could also force the departure of RBS Chief Executive Fred Goodwin, as shareholders have said he would need to go if the bank seeks to raise more cash.
The government could take seats on the boards of banks, a government source said on Saturday.
Spokespeople for all four banks declined to comment and government officials were not immediately available.
British Finance Minister Alistair Darling, attending a G7 finance ministers' meeting in Washington, said on Saturday the government was to give more details early this week about its already announced 400 billion pound banking rescue plan.
The Sunday Times said the scale of the fund-raising could lead to trading at the London Stock Exchange being suspended to give the market time to digest the impact.
The LSE downplayed that prospect, however. "My information is that the market will open on Monday," a spokesman said.
RBS, which has seen its market value fall to below 12 billion pounds, is to ask ministers to underwrite a 15 billion pound cash call, the Sunday Times said.
HBOS, Britain's biggest provider of mortgages, was seeking up to 10 billion pounds, Lloyds wanted 7 billion pounds and Barclays needed 3 billion pounds, the newspaper said.
Barclays, Britain's second biggest bank, has said it is considering raising capital privately and is expected to try and raise funds from existing shareholders to limit any funds provided by the government.
Lloyds is in the process of buying HBOS and the fundraising could see Lloyds renegotiate the terms of the deal, although both sides were still keen for the merger to go ahead, the Sunday Times said.
Banks were in crisis talks over the weekend with the Treasury, the Financial Services Authority and the Bank of England. The scale of the cash required by each will depend on estimates of more losses from their exposure to subprime mortgages and other financial instruments, the source said.
Last week's multi-billion pound package was aimed at stabilising banks and getting them lending again, but it failed to halt a collapse in share prices.
The package included a 50 billion pound cash injection, guaranteeing interbank lending by 250 billion sterling to help unfreeze wholesale markets, and extending a Bank of England scheme that swaps banks' risky assets for government debt to provide 200 billion pound of cash to the system. (Additional reporting by Myles Neligan; Editing by Anshuman Daga)
LONDON, Oct 12 (Reuters) - Major British banks are likely to announce their plans to recapitalise early on Monday, a person familiar with the matter said, a move which could see the government take multi-billion pound stakes in several lenders.
Banks are in talks with the government and regulators to determine how much capital each needs from 50 billion pounds ($86 billion) offered by Britain on Wednesday
An announcement is expected before market opens on Monday, said the source who declined to be identified because of sensitivity of the matter.
The Sunday Times said Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz), Lloyds TSB (LLOY.L: Quote, Profile, Research, Stock Buzz) and Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) could ask for a combined 35 billion pound lifeline.
That could result in the government becoming the biggest shareholder -- and even a majority investor -- in RBS and HBOS. It could also force the departure of RBS Chief Executive Fred Goodwin, as shareholders have said he would need to go if the bank seeks to raise more cash.
The government could take seats on the boards of banks, a government source said on Saturday.
Spokespeople for all four banks declined to comment and government officials were not immediately available.
British Finance Minister Alistair Darling, attending a G7 finance ministers' meeting in Washington, said on Saturday the government was to give more details early this week about its already announced 400 billion pound banking rescue plan.
The Sunday Times said the scale of the fund-raising could lead to trading at the London Stock Exchange being suspended to give the market time to digest the impact.
The LSE downplayed that prospect, however. "My information is that the market will open on Monday," a spokesman said.
RBS, which has seen its market value fall to below 12 billion pounds, is to ask ministers to underwrite a 15 billion pound cash call, the Sunday Times said.
HBOS, Britain's biggest provider of mortgages, was seeking up to 10 billion pounds, Lloyds wanted 7 billion pounds and Barclays needed 3 billion pounds, the newspaper said.
Barclays, Britain's second biggest bank, has said it is considering raising capital privately and is expected to try and raise funds from existing shareholders to limit any funds provided by the government.
Lloyds is in the process of buying HBOS and the fundraising could see Lloyds renegotiate the terms of the deal, although both sides were still keen for the merger to go ahead, the Sunday Times said.
Banks were in crisis talks over the weekend with the Treasury, the Financial Services Authority and the Bank of England. The scale of the cash required by each will depend on estimates of more losses from their exposure to subprime mortgages and other financial instruments, the source said.
Last week's multi-billion pound package was aimed at stabilising banks and getting them lending again, but it failed to halt a collapse in share prices.
The package included a 50 billion pound cash injection, guaranteeing interbank lending by 250 billion sterling to help unfreeze wholesale markets, and extending a Bank of England scheme that swaps banks' risky assets for government debt to provide 200 billion pound of cash to the system. (Additional reporting by Myles Neligan; Editing by Anshuman Daga)
EU leaders to study crisis plan in Paris
By Tamora Vidaillet
PARIS, Oct 12 (Reuters) - Leaders of euro zone countries hold an emergency meeting in Paris on Sunday hoping to agree on specific, pan-European measures to prevent market panic from triggering the most severe global downturn in decades.
Government officials have suggested action rather than talk could emerge from the first such gathering of the so-called Eurogroup, hastily arranged by President Nicolas Sarkozy after stock markets around the world plunged last week.
The meeting of the 15 countries which use the euro as their currency comes on the heels of a G7 summit of rich nations in Washington which offered no concrete, collective action but promised to do whatever was needed to unfreeze credit markets.
British Prime Minister Gordon Brown, whose country is not in the euro zone, will also meet Sarkozy on Sunday and a French official said the Eurogroup will likely use a rescue package unveiled by London last week as its reference point.
Speaking just before leaving Washington overnight, French Economy Minister Christine Lagarde said the Eurogroup would go beyond talking about remedies to "put meat, muscles on the bones of that skeleton and to develop, follow up and execute upon it".
Lagarde said leaderes needed to announce "detailed implementation measures as quickly as possible and before the opening of markets if necessary".
Sarkozy and German Chancellor Angela Merkel, who met in France on Saturday, said they had prepared "a certain number of decisions" to present at a European summit to try to restore normal flows in blocked credit markets. [ID:nLB553857]
LEADERSHIP QUESTIONMARKS
Sarkozy will meet Brown, European Central Bank President Jean-Claude Trichet and European Commission President Jose Manuel Barroso at 3.30 p.m. 1330 GMT, before the summit of euro zone leaders kicks off 90 minutes later. Britain's capital London is the largest financial centre in Europe and government sources said Brown had also been invited to sit in on part of the Eurogroup discussions.
Britain's rescue plan makes available 50 billion pounds ($86 billion) of taxpayers' money for injection into its banks and, crucially, calls for underwriting interbank lending, which has all but frozen around the globe.
In an interview with the Observer newspaper on Sunday, Brown said he would try to broker a Europe-wide bail-out of banks modelled on his plan, warning that the 'stakes could not be higher' for jobs, mortgages and the future of the economy."
The Sunday Times newspaper said Britain will launch its biggest retail bank rescue on Monday when the four largest, HBOS, Royal Bank of Scotland, Lloyds TSB and Barclays, ask for a combined 35 billion pound ($60.5 billion) lifeline. [ID:nLC211306].
Other countries are also stepping up their game, with Australia and New Zealand guaranteeing bank deposits.
On Saturday, media reports said Germany was readying a rescue package that could be worth up to $549 billion, including the injection of equity capital worth "double digit" billions into its banks and guarantees for interbank lending. [ID:nLB45144].
Still, question marks over the effectiveness of global efforts remained.
Dutch Finance Minister Wouter Bos criticised the G7 response to the crisis, saying on Saturday that while there was unity over the goals, there was nothing in the final statement from Washington about the instruments that would be used.
Bos lamented a lack of leadership and said the International Monetary Fund should play a leading role in finding solutions. (Additional reporting by James Mackenzie in Washington; Editing by Angus MacSwan)
PARIS, Oct 12 (Reuters) - Leaders of euro zone countries hold an emergency meeting in Paris on Sunday hoping to agree on specific, pan-European measures to prevent market panic from triggering the most severe global downturn in decades.
Government officials have suggested action rather than talk could emerge from the first such gathering of the so-called Eurogroup, hastily arranged by President Nicolas Sarkozy after stock markets around the world plunged last week.
The meeting of the 15 countries which use the euro
British Prime Minister Gordon Brown, whose country is not in the euro zone, will also meet Sarkozy on Sunday and a French official said the Eurogroup will likely use a rescue package unveiled by London last week as its reference point.
Speaking just before leaving Washington overnight, French Economy Minister Christine Lagarde said the Eurogroup would go beyond talking about remedies to "put meat, muscles on the bones of that skeleton and to develop, follow up and execute upon it".
Lagarde said leaderes needed to announce "detailed implementation measures as quickly as possible and before the opening of markets if necessary".
Sarkozy and German Chancellor Angela Merkel, who met in France on Saturday, said they had prepared "a certain number of decisions" to present at a European summit to try to restore normal flows in blocked credit markets. [ID:nLB553857]
LEADERSHIP QUESTIONMARKS
Sarkozy will meet Brown, European Central Bank President Jean-Claude Trichet and European Commission President Jose Manuel Barroso at 3.30 p.m. 1330 GMT, before the summit of euro zone leaders kicks off 90 minutes later. Britain's capital London is the largest financial centre in Europe and government sources said Brown had also been invited to sit in on part of the Eurogroup discussions.
Britain's rescue plan makes available 50 billion pounds ($86 billion) of taxpayers' money for injection into its banks and, crucially, calls for underwriting interbank lending, which has all but frozen around the globe.
In an interview with the Observer newspaper on Sunday, Brown said he would try to broker a Europe-wide bail-out of banks modelled on his plan, warning that the 'stakes could not be higher' for jobs, mortgages and the future of the economy."
The Sunday Times newspaper said Britain will launch its biggest retail bank rescue on Monday when the four largest, HBOS, Royal Bank of Scotland, Lloyds TSB and Barclays, ask for a combined 35 billion pound ($60.5 billion) lifeline. [ID:nLC211306].
Other countries are also stepping up their game, with Australia and New Zealand guaranteeing bank deposits.
On Saturday, media reports said Germany was readying a rescue package that could be worth up to $549 billion, including the injection of equity capital worth "double digit" billions into its banks and guarantees for interbank lending. [ID:nLB45144].
Still, question marks over the effectiveness of global efforts remained.
Dutch Finance Minister Wouter Bos criticised the G7 response to the crisis, saying on Saturday that while there was unity over the goals, there was nothing in the final statement from Washington about the instruments that would be used.
Bos lamented a lack of leadership and said the International Monetary Fund should play a leading role in finding solutions. (Additional reporting by James Mackenzie in Washington; Editing by Angus MacSwan)
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