Darling warns banks have ‘no automatic’ right to funds

In a written statement to Parliament yesterday, Alistair Darling gave a clear
warning to the banks there would be ‘no automatic right of access to the
recapitalisation scheme’.

He warns
would expect high-level conditions to be met before capital could
be offered to any eligible institution, including a plan to meet an appropriate
level of capitalisation, sustainable business model, broad-based funding model
and a credible senior management team.

The statement could be seen as a rebuttal to Sir Peter Burt and Sir George
Mathewson, the former bank executives who have been pushing to keep HBOS
independent by scrapping its merger with Lloyds TSB, the Financial

Darling’s warning also quashes any remaining hope for Barclays’ investors the
bank might get more favourable terms on government capital than it is currently
receiving on its £7bn fundraising.

Further reading:

Treasury eyes resale of its bailout stake in banks

the Financial Times story

Related reading