UK banking sector is nationalised
In a move which has been broadly welcomed by the financial markets it looks as though the vast majority of the UK banking sector will be under government control by the end of the year. As RBS stepped forward for a £30 billion handout and the Lloyds Bank / HBOS merged entity stepped forward for £17 billion many shareholders are starting to fret big time. But why?
It turns out that the chief executives at the top of the RBS, Lloyds Bank and HBOS tree are all for the chop as part of the deal with a new executive placed on the board of each of the groups to protect tax payers interests. There is now confusion about the future dividend policy of the banks in question and what role the government will play in the future direction of the banks.
As the move has been broadly well received there is a growing concern that the government may well look at other financial sectors such as insurance, etc. The deeper this nationalisation move goes the more concerned market will become as there may well be no free financial market left in the UK. What affect would this have on worldwide business and the attractions of London?
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