Bailed out U.K. Banks will be in debt for years.

Bailed-Out Banks 'Will Be In Debt For Years'

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7:23am UK, Thursday August 04, 2011

Ashish Joshi, Sky News correspondent

British taxpayers face a "waiting game" to see when public money used to
bail out struggling banks in 2008 will ever be returned.










Four banks were nationalised during the height of the credit crisis
two-and-a-half years ago.

On
Wednesday Northern Rock reported half-year losses and today Lloyds Banking Group announced pre-tax losses of
£3.25bn.

Royal Bank of Scotland (RBS) is predicted to report a £3bn loss on
Friday.

Based on the current share price the Government has a £45.22bn stake in
RBS.

It also holds £17.42bn worth of shares in Lloyds Banking Group. The Bradford
and Bingley has been loaned £27bn of public money.

Northern Rock Asset Management currently owes the Government £20.7bn and in
addition £1.4bn has been invested in Northern Rock PLC - the high street arm of
the business.

There is a wider responsibility here as well, for the banks to give something
back to the rest of the economy they have damaged.

Simon
Chouffot, the Robin Hood Tax Campaign



According to these figures, each British taxpayer has an exposure to these
banks of more than £3,500.

City analyst Chris Skinner is sure the Government's investment will be
returned but warned it could take a number of years.

"The situation right now that the banks' share prices have been hammered. The
Government has lost up to 40% of the investment it made. They invested some
£76bn so they've lost somewhere around £30-40bn in Lloyds Banking Group and RBS
alone.

"Originally I thought 2013 or 2014 would have been a good time for the banks
to be sold back to private investors and make some money. Now maybe we're
looking at 2015 or even later. It's really a waiting game."



Analysts say it could take years for the Government's
investment to be returned



The focus right now may be on the nationalised banks but the industry as a
whole has been the beneficiary of some serious cash courtesy of the Bank of
England.

Since March 2009, £200bn has been pumped into the economy through
quantitative easing. It is figures like these that vex banking reform
campaigners.

Simon Chouffot from the Robin Hood Tax Campaign
says it is time for the banks to be more collectively responsible.

"That is one incredible IOU from the banks to society. I think eventually
we'll see some of that money but not all of that money. But there is a wider
responsibility here as well, for the banks to give something back to the rest of
the economy they have damaged.

"People have lost their jobs, our services have been hit as a result of the
banks' behaviour."

We can't really expect the bankers to repay the massive loan and pay themselves the obscene bonuses that they seem to believe they are entitled to........

Come on Cameron pull your finger out and repossess the public money your predecessor Brown showered on the deviant merchant wbankers!!

The Chairman of Barclays is threatening to move the Bank to another Country if the Government brings in the seperation of Bank business so that a
retail dept would not be mixed with investment dept. What a bl***y cheek when Barclays pays the lowest Tax of all the Banks. Someone on sky
comments suggested everyone take their money out and put it in a Post Office account where it would be safe .

Gordon Brown has a lot to answer for, selling half our Gold to buy Euros.

Some British banks are resisting efforts by the City regulator to oblige them
to disclose more detail of their exposure to troubled Eurozone governments, I
have learned.

The big UK lenders have been asked by the Financial Services Authority (FSA)
to agree a more detailed template for identifying their holdings of sovereign
debt in time for their annual results early next year.

The FSA’s push comes amid fresh worries about the health of the European
banking sector. Yesterday, French banks – and in particular, Societe Generale,
one of the country’s most important financial institutions – saw their shares
plunge because of rumoured doubts about their solvency.

Later today, George Osborne, the Chancellor, will update MPs on the state of
the UK economy and the contingency plans in place to protect Britain from
another prolonged shock to the financial markets.

I’m told that the Treasury has briefed the big UK banks in recent days that
the Bank of England stands ready to provide additional liquidity support if
there is a drought in the short-term funding markets.

Mr Osborne is unlikely to spell out much detail about those contingency plans
but I expect him to say that big UK banks are well-capitalised and have access
to sufficient liquidity.

The FSA’s push for banks to reveal more detail of their sovereign debt
holdings follows a round of stress tests by the European Banking Authority that
were criticised for omitting key details of their balance sheet.

In recent weeks, the FSA has been holding talks with big UK banks such as
Barclays, HSBC and Royal Bank of Scotland about how they identify their holdings
of government debt.

But some bankers point out that the industry already operates a code for
financial reporting disclosure and believes additional measures are
unnecessary.

To be clear, the FSA is not at this stage forcing banks to make more detailed
disclosures. But people familiar with the talks say the regulator has left them
in no doubt that it wants to see a more consistent disclosure regime.

“We believe that we are best-placed to decide which information to disclose
to investors,” one bank executive told me.

Another said that his bank’s holding of certain Eurozone government bonds was
so negligible as to be entirely immaterial and “not worth reporting”.

It emerged last week during the banks’ half-year reporting season that the
FSA had suggested disclosing their holdings of Belgian sovereign debt. Lloyds
Banking Group decided to accede to the request, while others, including
Barclays, did not.

The regulator’s discussions with banks are being led by Richard Thorpe, its
accounting and audit sector leader.

Stephen Hester, chief executive of Royal Bank of Scotland, said last week
that the taxpayer-backed bank already disclosed more detail about its balance
sheet “than any other bank in the world”.

“Our disclosure is so far ahead of anything anyone else is doing that I think
if the FSA have a view, it will to be bring other people closer to us,” he said
last week.


Mark Kleinman.....sky news.