Lloyds bank set to escape asset protection scheme
Rumours in the city suggest that Lloyds bank is on the verge of receiving official clearance from the UK government and UK authorities with regards to leaving the government's asset protection scheme. This is a scheme which Lloyds bank agreed to join some time ago but requires a £15 billion premium to cover hundreds of billions of pounds of potentially toxic assets and ultimately protect the company's balance sheet.
However, over the last few months there has been a recovery in the UK financial market and the group is now looking to raise around £11 billion from existing investors which it will use to shore up the balance sheet and put the recent past behind it once and for all. While there has been no official confirmation regarding the company's withdrawal from the asset protection scheme sources from the Bank of England, the Treasury and the Financial Services Authority have hinted this is on the cards in the short term.
This will allow Lloyds bank to "tap" the market for a significant fundraising, something which has been on the cards for some weeks now but has been delayed due to regulatory clearance and the position regarding the asset protection scheme.
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