RBS Denies Asking For More Funds Posted on October 7th
Royal Bank of Scotland has insisted it did not make a request to the Government for extra capital.
RBS shares are down to a 13-year low
Bank shares plummeted amid reports some of the major UK institutions were in funding talks with the Government.
The Government confirmed it will discuss the structure of a possible bank recapitalisation scheme with the country’s major lenders “over the next couple of days”, an industry source said.
Britain’s second biggest bank Royal Bank of Scotland remains the biggest loser, its shares at one point dropping by 35%, a 13-year low.
Shares in Lloyds TSB have also fallen, down 6%.
Like RBS, both HBOS, whose shares are down 14%, and Barclays (down 5%) insist they have not requested any cash from the state.
Barclays earlier issued a statement saying it is “categorically not requesting any capital from the UK Government”.
It emerged that banks have held initial talks with the Government last night.
But Downing Street says the Treasury is not speculating on possible financial crisis policy options.
The talks will focus on what form of equity the Government would receive in return for providing banks with any injection of taxpayer’s money.
“That’s what they will be working on over the next couple of days,” the source told the Reuters news agency.
UK banking shares were sharply lower due to renewed speculation that the Government may take stakes in the main lenders.
The effort to bolster finances in the face of the global credit crunch would dilute existing shareholders.