November 19, 2008

British finance minister Alistair Darling said on Tuesday that any renegotiations of last month's 37 billion-pound ($56 billion) bailout package for the country's banks could prove costly for shareholders already angered at the extent of their losses. Earlier this month George Mathewson and Peter Burt, former chief executives of Royal Bank of Scotland and Bank of Scotland respectively, called on HBOS to abandon its government-brokered takeover by Lloyds TSB.
They have argued that HBOS can survive as a standalone bank, drawing on the funds on offer under the government's bailout package which only materialised on Oct. 13, after the takeover deal had already been hatched. But Darling said in a written statement to parliament on Tuesday there was "no automatic right of access to the recapitalization scheme”.” The institution must have a sustainable business model and delivery plan," Darling said of any revised application.” The institution's funding profile, sources and mix must be clear, broad-based and sustainable and the senior management team must be credible."