U.K. authorities deny plans to nationalise Lloyds Bank
That the UK authorities have come out with a firm statement regarding the future of Lloyds bank and confirmed there are "no plans" for an outright nationalisation of the group. The wording is interesting because while many investors and analysts believe a full nationalisation is not far away, it appears inevitable that the UK taxpayer will be forced to increase its stake in the ailing group.
There have also been a number of suggestions that should Lloyds Bank be taken under government control it will effectively be open season for the other banks in the UK. Lloyds Bank is far more influential than the likes of Bradford & Bingley and Northern Rock, which have both been taken under government control over the last few months. While there do not appear to be any major issues at the moment regarding other UK banks, with the only possible exception being Royal Bank of Scotland, there is no doubt that times are still very tough.
The speculation regarding Lloyds Bank and its future has come on the same day that the group saw its Triple-A credit rating removed by Moody's as a direct consequence of the group's exposure to HBOS. The increase in the cost of finance is just another hurdle that the group will need to overcome if it is to stay in public hands.
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