Royal Bank of Scotland, Britain's second biggest bank, is considering launching a multi billion-pound cash call on its shareholders to shore up its balance sheet, in a move that may prompt similar action by its rivals, The Guardian reports.
The possible rights issue, which could raise between £5bn and £12bn, would put the bank's chief executive, Sir Fred Goodwin, under intense pressure after last year's audacious takeover of parts of the Dutch bank ABN Amro put strain on RBS's all-important capital ratios.
Until now RBS has insisted that it would be able to avoid a cash call by generating income through its everyday operations. But the slowdown in the markets is reducing expectations for income growth at all the major banks this year, and may force RBS to concede that it will need to raise capital through other means.
THE CITY IS facing its blackest day in almost 20 years with investment banks revealing plans to axe more than 3,500 jobs in London, according to The Telegraph.
Citigroup is preparing to make about 2,400 cuts in its 12,000-strong London office on top of 900 planned redundancies at UBS and a further 400 at Merrill Lynch.
Recruitment experts said the scale of the job losses was the worst since the dark days of the 1991 recession, eclipsing even the massive City cutbacks in the wake of the 2001 dotcom crash.
INFLATION IS LIKELY to rise above 3% later this year as a weak pound exacerbates rising commodity prices and labour costs in China pick up, the Bank of England's chief economist has warned, The Telegraph reports again.
Charles Bean said that the Monetary Policy Committee was "walking a tightrope" between attempting to stimulate growth as the credit crunch bites and allowing inflation to take off.
He said that since August, the pound had fallen as much as it did after it crashed out of the European Exchange Rate Mechanism in 1992, boosting exports but increasing import costs.IFAonline
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