Alistair Darling was night battling to avoid fully nationalising Royal Bank of Scotland after the state-controlled lender suffered a 67% plunge in its share price when it revealed the biggest loss in Britain’s corporate history.
In spite of lifting its shareholding in RBS to 70% yesterday, the government is desperate to avoid nationalising another bank and saddling the Treasury with RBS’s £2,000bn balance sheet and the political responsibility for the bank’s lending policy.
'We have a clear view that British banks are best managed and owned commercially and not by the government,' the chancellor told the Commons.
Nevertheless, shares in British banks suffered further sharp falls amid concerns the government is poised to increase its grip on the country’s largest lenders as part of its efforts to kick-start lending to consumers and businesses and limit the depth of the recession.
Financial Times, The Times, Daily Telegraph
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