Watching Cable TV news tonight is franky a bizarre experience. Gordon Brown seems to be the hero of the day, and thus we get to see the highlights of his political life, including the time his best mate Tony Blair bought him an ice cream (I guess you had to be there...).
Just a few weeks ago the very same Gordon Brown was the most unpopular prime minister in the history of prime ministers (well, at least since Tony Blair, or maybe John Major), so this is rather an unexpected development. I'm sure he can find plenty of ways to make himself unpopular again before the next election, so I hope he enjoys it whilst it lasts.
The British plan will result in the government owning about 60% of RBS and 40% of the merged Lloyds TSB and HBOS:
BBC business editor Robert Peston said the announcement would "count as perhaps the most extraordinary day in British banking history" and was "an absolute humiliation" for the banks.
As part of the banks' announcements:
- Lloyds and HBOS said they had renegotiated their merger, reducing the number of Lloyds TSB shares that HBOS shareholders will receive.
- RBS said chief executive Fred Goodwin was quitting with immediate effect - without a severance pay-off. He will be replaced by British Land boss Stephen Hester. RBS chairman Tom McKillop is to retire.
- HBOS chief executive Andy Hornby and chairman Lord Dennis Stevenson said they would stand down from their posts.
- RBS and Lloyds TSB/HBOS will return mortgage and small-business lending to 2007 levels, which is much more than they are currently lending.
Ho hum. The curse of ABN Amro strikes again - Fortis had to be rescued last week, and now it's RBS. How sad it is to see bankers humiliated...