Britain to create new banks
(2 November 2009 – UK) Three new banks will be created from the Royal Bank of Scotland, Lloyds Banking Group and Northern Rock as the government seeks to recoup taxpayers’ money used to assist the banks during recession.
The government owns Northern Rock, 43 percent of Lloyds and 70 percent of RBS and is hoping that the creation of the three new banks will increase competition in the financial sector.
The three existing lenders will be spilt up into parts and sold over the next few years to new entrants to the sector, focusing on mortgages and deposits.
There were no further details released of the new banks to emerge from the plans to split Northern Bank, Lloyds and RBS.
Alistair Darling, finance minister, told the BBC that the government’s goal is to have a substantial divestment; perhaps branches or particular institutions that they own will be made available to other institutions.
Mr Darling added that unless competition is created there are going to be half a dozen big providers which would be a big reduction in choice and that would not be acceptable.
Mr Darling also stated that he is determined that because the taxpayer put a lot of money into stabilising the system, the taxpayer is entitled to get that money back.
All three banks received huge government bailouts at the height of the global economic storm.
The three existing lenders will be spilt up into parts and sold over the next few years to new entrants to the sector, focusing on mortgages and deposits.
There were no further details released of the new banks to emerge from the plans to split Northern Bank, Lloyds and RBS.
Alistair Darling, finance minister, told the BBC that the government’s goal is to have a substantial divestment; perhaps branches or particular institutions that they own will be made available to other institutions.
Mr Darling added that unless competition is created there are going to be half a dozen big providers which would be a big reduction in choice and that would not be acceptable.
Mr Darling also stated that he is determined that because the taxpayer put a lot of money into stabilising the system, the taxpayer is entitled to get that money back.
All three banks received huge government bailouts at the height of the global economic storm.
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