Entries Tagged 'Bank Run' ↓
October 12th, 2008 — Bank Run, Bank Takeover, Credit Crisis, Credit Crunch, Economy, London, Nationalization, RBS, Royal Bank of Scotland, Subprime, UK
The UK government has nationalized the Royal Bank of Scotland (RBS) late Sunday night, by injecting about $35 billion of taxpayer money into the failing bank.
The Government is also expected to take over HBOS soon as well, as state ownership in the British financial sector becomes the most far-reaching since the World War II. Initially, HBOS was going to have been taken over by Lloyds TSB, but that deal all but collapsed on Saturday.
In addition to the RBS and HBOS purchases, the government will also guarantee interbank lending. The scale of these recent nationalizations eclipses the bailouts of Northern Rock and Bradford & Bingley earlier this year, and also represents a huge risk for the taxpayer.
Fred Goodwin, CEO of RBS is expected to step down on Monday, and Andy Hornby, CEO of HBOS, will likely resign as well.
October 9th, 2008 — Bailout, Bank Failure, Bank Run, Credit Crisis, Credit Crunch, Economy, Nationalization
The U.S. Treasury Department is actively pursuing the purchase of equity stakes in many of the nation’s banks.
At a White House briefing held today, a spokesperson confirmed reports that America would soon join Iceland, Italy and the U.K. in injecting capital directly into their failing banking systems.
The nationalization move would be made under the auspices of the $700 billion Wall Street bailout.
Although the original plan for the bailout was to have the Treasury buy damaged mortgage-backed securities from banks, the Bush administration is now saying that direct investment is considered part of the powers under the act passed last week.
Treasury of the Secretary Henry Paulson hinted at this plan on Wednesday when he gave a speech about the bailout. He said increasing investment in the U.S. bank system is a Treasury goal.
October 8th, 2008 — Bank Failure, Bank Run, Citibank, Credit Crisis, Credit Crunch, Economy, FDIC, Wachovia, Wells Fargo
Citigroup, Wells Fargo and Wachovia have all agreed to hold off on any litigation until Friday, as they try to put together an amicable agreement regarding the fate of the failing bank.
A joint statement was issued that said the extension for the litigation standstill will now expire at 8 a.m. on Friday, Oct. 10th. It had originally been set to expire at noon today.
Citi filed a $60 billion lawsuit on against Wachovia and Wells Fargo on Monday for breaching an exclusivity agreement.
Citi had initially agreed to pay $2.16 billion for Wachovia’s banking operations in a government-assisted deal on September 29th. Wells Fargo trumped that offer by offering $15.1 billion for all of Wachovia’s businesses on Friday.
Wachovia would have failed on Sept. 30th if Citi hadn’t stepped in to purchase its banking operations, Citi said Monday in the lawsuit. Citi allso alleges that Wells Fargo had first walked away from a Wachovia deal before federal authorities asked Citi to help.