Royal bank of Scotland goes under - except they haven't really, sorry about that.

Dolph said:
:confused:

It's not gone under in the slightest. It's taken advantage of the cash for shares deal offered by the government (acting as a shareholder) to bolster it's market position. As a consequence, the government has bought a large number of shares in the bank, giving it a (slight) majority holding.

How is that going under?

If they'd sold the shares to another bank, would you still classify them as going under?
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+1

Can a mod rename this thread to something more sensible!
 
Dolph said:
Would they have even made those shares available if it wasn't for the government?
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The point is that whoever buys those shares THE MONEY IS STILL DESPERATELY NEEDED BY RBS. They could have dropped the price, but then they'd have needed to sell more shares to rebuild the reserves they need to be a legally functioning bank.

Technically any bank which requires such massive investment at short notice is skating on the edge of insolvency. We live in such strange times that people now take such things for granted.

"The government is now planning to appoint three non-executives to the board of RBS, which will also need a new chairman when Sir Tom McKillop retires after next year's annual meeting. Along with Goodwin, who stopped being chief executive last week but will leave at the end of January, McKillop said "sorry" to shareholders last week for the bank's near-collapse in the financial market meltdown.

The fundraising is the second embarked upon by RBS this year. In April it announced the £12bn rights issue – then the biggest every seen in London – to bolster its balance sheet that led to a host of other banks such as HBOS, Barclays and Bradford & Bingley racing to raise fresh funds by the summer. The RBS rights issue was priced at 200p – then a near 50% discount to its prevailing share price which has since collapsed. At its peak last year, RSB was worth £60bn but it was worth barely a tenth of that before today's cash call bolstered its capital cushion and market value."

Andrew McP
 
Majago said:
Tesco finance is with RBS.
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Tesco is their own bank, they bought out rbs partly because rbs is so desperate for money and tesco is relatively strong afaik

I doubt tesco would be affected much by rbs troubles


rbs may suffer credit rating downgrades I read but since they are bankrolled by the guys with cash printing presses, the actual return on their investments long term should matter more
 
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