1. malct said...

from the article :-
"The banks are now in urgent discussions with the Treasury to renegotiate the terms of the bailout. There are fears that the European stipulation could lead to the collapse of the Lloyds TSB-HBOS merger."

OH HECK what does that mean?

could it be?

from the article
""Because if investors don't come in then the Government will own even more, so we've got to get this balance."

it gets worse :-

"The preference shares cannot be repaid for at least five years."

When announcing the scheme on Monday, the Government initially said that dividends may not be paid until the preference shares were repaid. However, after banking shares fell it was claimed that the Treasury had “clarified” the deal and that the dividend suspension could be renegotiated after a year.

However, the European Commission has ruled that the bailout can only proceed if dividends are banned until the preference shares are repaid. Jonathan Todd, a spokesman for the Commission, said: "The Commission wanted to ensure that there was a strong incentive for the banks to repay the state as quickly as possible."