Royal Bank of Scotland and Lloyds Banking Group are expected to sign legally binding agreements to lend at least £20bn each more to small businesses and households as the price for insuring at least £500bn of their most troublesome assets with the taxpayer," reports The Guardian .
The banks would also agree to a code of conduct on pay policies and could issue up to £20bn of a newly created class of share to the government to pay for the much-anticipated asset protection scheme. The precise agreement between the banks and the Treasury is still being hammered out with the aim of making an announcement to coincide with RBS's 2008 figures on Thursday. Sources cautioned that the negotiations were complex and that an agreement may yet not be reached. The discussion with Lloyds is also thought to include the possibility of some £4bn worth of preference shares, which cos...
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