The British Treasury may appoint its own representatives to the boards of the country’s biggest banks as it begins buying stakes in them over the next few weeks, a government official said.
Policy makers need to consider how to protect taxpayers’ interests when taking significant stakes in lenders, said the official, who spoke on condition of anonymity.
Governments in Europe and North America are preparing plans to buy stakes in banks to alleviate the credit freeze threatening to tip the world into a recession. The UK’s plan contrasts with the US, where Treasury Secretary Henry Paulson said two days ago that US authorities would have non-voting shares.
The UK government last week said it would invest at least £50 billion (US$87 billion) to recapitalize Royal Bank of Scotland Group Plc, Barclays Plc and at least six others.
Britain’s program may be big enough to give the government a controlling stake in some lenders.
Edinburgh-based RBS, with a market capitalization of £11.9 billion, will seek about £10 billion from investors and the government, a person familiar with the matter said. Barclays’s market capitalization is £17.4 billion.
UK Treasury officials have been working with the banks on the program and today will begin outlining details of a related plan to guarantee about £250 billion in interbank loans though an insurance system.
Once it has unveiled how it will price the insurance policies, regulators will begin talking to banks about capital injections and what share of their business is nationalized.
“We are working hard toward implementation,” Chancellor of the Exchequer Alistair Darling told reporters in Washington. “We will be doing something pretty quickly. It is essential we take action here in the UK.”
British Prime Minister Gordon Brown’s government last week was forced to step up its efforts as Britain lurched toward a recession and shares of the country’s biggest banks lost more than half their value in a week. Since then, Darling has been urging fellow finance ministers in Washington to adopt similar plans to rebuild bank balance sheets.
Paulson signaled his top priority is getting his initiative to buy financial stocks running as soon as he can: “This is a plan that I’m quite confident will work.”
Canada’s government last week moved to shore up its banks by saying it will buy as much as C$25 billion (US$21.6 billion) in mortgages from them. The German government will create a fund of as much as 100 billion euros (US$134 billion) to recapitalize German banks hurt by the financial-market crisis, Handelsblatt newspaper reported, without identifying its sources.
Finance ministers and central bankers from the G7 major nations, meeting in Washington on Friday, agreed to ensure that key banks will get access to liquidity, funding and taxpayer funds as capital.
RBS, Britain’s third-largest bank by market value, had its credit rating cut by Standard & Poor’s for the first time in almost a decade on concern that its financial health was deteriorating last week.
The steps to partially nationalize the industry provide “essential preconditions” to kick-start lending, Darling said.
“We had to say to banks: you recapitalize and, if you do that, we will guarantee your inter-bank lending,” he said. “That’s what they need in order to get the funds they need.”
INVESTIGATION: The case is the latest instance of a DPP figure being implicated in an espionage network accused of allegedly leaking information to Chinese intelligence Democratic Progressive Party (DPP) member Ho Jen-chieh (何仁傑) was detained and held incommunicado yesterday on suspicion of spying for China during his tenure as assistant to then-minister of foreign affairs Joseph Wu (吳釗燮). The Taipei District Prosecutors’ Office said Ho was implicated during its investigation into alleged spying activities by former Presidential Office consultant Wu Shang-yu (吳尚雨). Prosecutors said there is reason to believe Ho breached the National Security Act (國家安全法) by leaking classified Ministry of Foreign Affairs information to Chinese intelligence. Following interrogation, prosecutors petitioned the Taipei District Court to detain Ho, citing concerns over potential collusion or tampering of evidence. The
NEGOTIATIONS: The US response to the countermeasures and plans Taiwan presented has been positive, including boosting procurement and investment, the president said Taiwan is included in the first group for trade negotiations with the US, President William Lai (賴清德) said yesterday, as he seeks to shield Taiwanese exporters from a 32 percent tariff. In Washington, US Trade Representative Jamieson Greer said in an interview on Fox News on Thursday that he would speak to his Taiwanese and Israeli counterparts yesterday about tariffs after holding a long discussion with the Vietnamese earlier. US President Donald Trump on Wednesday postponed punishing levies on multiple trade partners, including Taiwan, for three months after trillions of US dollars were wiped off global markets. He has maintained a 10 percent
TRADE: The premier pledged safeguards on ‘Made in Taiwan’ labeling, anti-dumping measures and stricter export controls to strengthen its position in trade talks Products labeled “made in Taiwan” must be genuinely made in Taiwan, Premier Cho Jung-tai (卓榮泰) said yesterday, vowing to enforce strict safeguards against “origin laundering” and initiate anti-dumping investigations to prevent China dumping its products in Taiwan. Cho made the remarks in a discussion session with representatives from industries in Kaohsiung. In response to the US government’s recent announcement of “reciprocal” tariffs on its trading partners, President William Lai (賴清德) and Cho last week began a series of consultations with industry leaders nationwide to gather feedback and address concerns. Taiwanese and US officials held a videoconference on Friday evening to discuss the
PERSONAL DATA: The implicated KMT members allegedly compiled their petitions by copying names from party lists without the consent of the people concerned Judicial authorities searched six locations yesterday and questioned six people, including one elderly Chinese Nationalist Party (KMT) member and five KMT Youth League associates, about alleged signature forgery and fraud relating to their recall efforts against two Democratic Progressive Party (DPP) legislators. After launching a probe into alleged signature forgery and related fraud in the KMT’s recall effort, prosecutors received a number of complaints, including about one petition that had 1,748 signatures of voters whose family members said they had already passed away, and also voters who said they did not approve the use of their name, Taipei Deputy Chief Prosecutor
RSS