Monday, 10 May 2010
Exclusive: Banks to be broken up in Con-Lib deal
George Osborne has of course advocated this in the past as a solution to the long-term instability of the UK having four banks which are nearly as big in assets as the UK GDP. On the Lib Dems side, the City has been horrified at their smash the City mantra.
I would not like to own shares in the likes of Barclays or RBS when this news comes out, at it will be a big cost to share holders to split the businesses and lose all the benefits that the stable cash generative retail bits give to the high risk Investment Banks.
Quite how this will work for overseas institutions I do not know.
Some of the banking shares were the biggest benefactors of the stunning rally today; on the back of the EU debt Union which has been de facto announced. Seems like the people of Germany are going to pay for the Euro after all and subsidise the PIGS trough.
No prizes for guessing the effect when this gets out.