Bank recapitalisation 'to cost £37 billion'
The government is to take control of RBS after weekend negotiations between ministers, bank executives and the Bank of England.A total of £20 billion of shares in the firm are to be purchased, equivalent to a 60 per cent stake.Meanwhile, a £17 billion will be spent on HBOS and Lloyds TSB stock, which will result in the government holding over 40 per cent of a new "super-bank", to be created when the two lenders merge later this year.Barclays, whose executives were also present at the talks, has decided that it will remain independent - and is to seek money from private investors instead.The government's bank recapitalisation plan, first announced last Wednesday, is aimed at shoring up investor confidence in the bank system by backing firms up with public money.In a statement, the treasury said: "These actions will also help to build confidence and security in our banking system and provide greater protection for consumers."Investors have responded largely positively to the scheme, with the FTSE 100 rising by over six per cent at one point this morning.
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