Govt injects £37bn into three ailing banks

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The Government will pump £37bn into ailing banking giants RBS, HBOS and Lloyds TSB.

In a bid to avoid any major bank failures and bring stability to the financial system, the Treasury will inject £20bn in Royal Bank of Scotland, £11.5bn in HBOS and £5.5bn in Lloyds TSB. The plan means the Government will now be the largest shareholder in RBS; however the HBOS and Lloyds TSB lifelines will be issued upon their “successful merger”. Each bank will now have Tier 1 capital ratio in excess of 9%, significantly higher than international standards. Barclays will not participate in the scheme, announcing plans to raise £6.5bn from the market. The bank has also scrapped its £2bn ...

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