Some intriguing snippets of news are leaking out that make for grim reading for shareholders of UK bank stocks. last week the dreadful HBOS announced it losses on corporate loans were in the extreme zone. As such, an analyst has pointed out that the joint HBOS/Lloyds bank will be heavily loss making and is likely to be nationalised next year.
The government too has been making plans, Robert Peston has blogged on some of the key long-term changes being made, in addition I see that the IMF are also suggesting that Government's get more radical in their approach to the credit crisis.
If the Government wants banks to lend more, it will have to give them more money as they are not going into risky business in this environment. More money means either printing it or borrowing from future tax payments. Either way it will mean the Banks too have to give more of their capital to the Government and the taxpayers 'suffer.'
2009; Nationalised Banking, I hope Labour are honest enough to put it in their election manifesto...