The Government's bail-out of the UK banking system dominated the headlines early this week as RBS, Lloyds TSB and HBOS asked for £37bn of taxpayers' cash to shore up the troubled institutions. RBS will take £20bn, HBOS £11.5bn and Lloyds £5.5bn in exchange for 'part-nationalisation', with the state taking stakes in the banks. Lloyds will renegotiate downwards the terms of its HBOS takeover and the CEOs and chairmen of both RBS and HBOS have quit.
- The reaction
Monday was dubbed 'the most important day in the history of British banking' in The Daily Telegraph. It led every front page and news bulletin - many noting the large bonuses received by bank bosses in recent times. PM Gordon Brown described the events as 'unprecedented but essential'.
- Who are the staff affected?
The besieged banks have a plethora of comms professionals and agencies that have been on red alert for a number of months (PRWeek, 3 October). The British Bankers' Association has played a key lobbying role in thrashing out regulatory and political solutions.
- What happens next?
Predicting the next twist of this incredible saga is a fool's errand. But it is clear that the banks need to regain the trust and confidence of the City after seeing their share-prices crash - especially Barclays, which is looking for an injection of £6.5bn of non-governmental cash. The Government and banking industry also face a wider PR battle to sell the bail-out as necessarily for taxpayers, rather than a perceived propping up of failed fat-cats.
£500bn - Size of Government's bank rescue package.
