Despite the bail-out package announced by the British government, shares of RBS, Lloyds TSB and HBOS have fallen sharply. The UK government had announced a bail-out package of 37bn pounds for these banks in order to secure their future. The government now has a major share in these banks. In RSB it has 60% shares whereas in the combined Lloyds TSB and HBOS it has 40% shares. This means that the banks will have to share a major portion of their profits with the government.
Injection of money can be a good sign for the banks but obviously it has disclosed the weak financial position of the banks which has resulted in decline in share prices.
There are no signs that the financial crisis will end soon despite the steps taken by central banks worldwide to protect the banking system.
Despite the bail-out package announced by the British government, shares of RBS, Lloyds TSB and HBOS have fallen sharply. The UK government had announced a bail-out package of 37bn pounds for these banks in order to secure their future. The government now has a major share in these banks. In RSB it has 60% shares whereas in the combined Lloyds TSB and HBOS it has 40% shares. This means that the banks will have to share a major portion of their profits with the government.
Injection of money can be a good sign for the banks but obviously it has disclosed the weak financial position of the banks which has resulted in decline in share prices.
There are no signs that the financial crisis will end soon despite the steps taken by central banks worldwide to protect the banking system.
Related
