Monday, Oct 13, 2008
Shares in banks that are to be partially nationalised under Gordon Brown’s £37 billion bail-out have plunged on the stock market.
Despite the FTSE-100 rising, shares in HBOS had dropped another 25 per cent by midday, with Lloyds TSB having lost nine per cent and Royal Bank of Scotland (RBS) down 6.7 per cent. The banks have been ordered to stop paying dividends to shareholders until they are in a position to pay back the public purse.
Shares in Barclays and HSBC – the two banks which have made clear they do not need to take the Government’s money – have risen, by 5.3 and 7.9 per cent respectively.
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Mr Brown earlier hailed the Government’s plan to take large stakes in the three banks as proof that it will be a “rock of stability” during the financial crisis.
Confirming that the Treasury will use billions of taxpayers’ money to buy fresh capital, Mr Brown said: “The Government can not just leave people on their own to be buffeted about.”
“For savers, for small businesses, and for homeowners, we must in an uncertain and unstable world be the rock of stability on which the British people can depend,” the Prime Minister told a Downing Street news conference.
This article was posted: Monday, October 13, 2008 at 11:23 am