Government left with £2.3 billion loss after shareholders snub RBS rescue
The government has today been left nursing a £2.3 billion loss after Royal Bank of Scotland shareholders snubbed their attempt at raising £15 billion and leaving the government to take up the vast majority of shares on offer. The government's holding is now 57.9% and gives its effective control of one of the U.K.'s largest commercial banks.
This is not the start to the rescue package which the UK government had hoped for, after suggesting that buying shares at "rock bottom prices" would give the taxpayer the potential for substantial growth in due course. Of course this may happen in due course, but at the moment on day one of acquiring shares the government is already nursing a £2.3 billion loss. This does not bode well for the next round of rescue bailouts which will involve Lloyds TSB and HBOS to name but two.
As we have suggested on a number of occasions there is now the possibility of a conflict of interest between the government and their stake in Royal Bank of Scotland. This has the potential to be a real thorn in the government's side and could be a major issue over the coming weeks, months and years ahead.
Share this..
Related stories
Could increased producer prices fuel inflation?
As we covered earlier today, the increase in UK producer prices has accelerated to the fastest rate in 14 months amid concerns that inflation could be fuelled and become a problem in the short to medium term. It is believed that the recent depreciation of sterling against the likes of the dollar and the euro have added to the cost of producing goods in the UK hence the increase in the Producer Pri...
Read More5m Expected To Join Social Housing List
As the credit crunch continues to impact upon a range of areas of the UK economy it seems that the demand for social housing is set to mushroom over the next five year. The Local Government Association believe that the current problems in the UK property market will see the social housing waiting list pushed up to 5 million causing a massive strain on local authority budgets. While the above s...
Read MoreBank of England calls for more power
The UK regulatory framework for the financial sector looks like finding itself in the middle of a serious power struggle after the Bank of England announced that it would request more powers from the government to intervene directly in markets. This has the potential to put the Bank at odds with the FSA which for many years now has been the preferred regulator of the financial services market.
Even the mighty Microsoft is struggling
Microsoft has today released third-quarter results for 2008 which show an 11% fall in profits to $4.17 billion. The figure was well below analyst expectations and was accompanied by a cull of 5000 jobs which is to hit the company over the next 18 months. It would appear that even the mighty Microsoft is struggling as the worldwide economy continues to fall and technology spending heads downwards.<...
Read MoreSimple ways to save money : Insurance
While we have seen various reports over the last few weeks of people deciding against renewing their home insurance, car insurance and other insurance policies, there are obvious risks with this particular strategy - not to mention possible legal implications. However, there are many ways to reduce your insurance premiums which will only take a few moments of your time.
It is well-k...