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Royal Bank of Scotland under pressure for backing Cadbury bid

Royal Bank of Scotland is today under pressure from unions and MPs after news that the company is backing the hostile foreign takeover approach to Cadbury. The bid by Kraft Foods is valued at around £10 billion and Royal Bank of Scotland is one of a consortium of banks around the world which have agreed to provide finance for the bid. So why the fury from within the UK?

The problem is that Royal Bank of Scotland is seen to be backing an overseas bidder which may possibly be at odds with the best interests of the UK economy and the UK workforce. When you also consider the fact that Royal Bank of Scotland has refused, at least for now, to increase liquidity in the money markets for UK consumers and UK businesses, this is the main reason for the controversy.

The UK government now has a majority stake in Royal Bank of Scotland and is seen by many as guilty by association of leaving the UK markets to flounder while readily jumping into bed with overseas customers. Whether this is a little harsh is open to debate but the truth is that money pumped into the UK banking system appears to be leaking out into overseas markets, something which the UK government had not expected.

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