Government gives £37bn of new bail-out cash to RBS and Lloyds

The government of Great-Britain invested £37bn in RBS and Lloyds. Last year they injected the same sum of money in these two companies. This new injection of money makes RBS the world's biggest government rescue. They have now received £53.5bn of state money.

Lloyds has launched £13.5bn rights issue to emphasise its commercial viability. The government pays £5.9bn of these rights issues because they are stakeholder with 43.5 per cent. They have also a plan to switch their existing debts into £7.5bn of contingent capital instruments. In case of crisis Lloyds will be able to sell them.

These actions have had in impact on the stock market.
The share of Lloyds rose by 3 per cent, while the share of RBS lost 7 per cent.

The government demanded that the companies don’t give anymore bonuses the their employees who earn more than £39,000. Other bonuses must be delayed or must be smaller than usual.Some people say that’s it is just for getting votes the government make these demands because it isn’t possible to receive these actions.

In my opinion it is a good job from the government the help those two banks. They have become stake holder and when the market revives they could sell their shares. Their demands for cutting off the bonuses is also a good point. I think some of the top employees earn to much bonuses compared the their work.

source: http://www.ft.com/cms/s/0/cf70e030-c8e2-11de-8f9d-00144feabdc0.html