U.K. considers nationalizing banks
TEXT OF STORY
Steve Chiotakis: And if that weren’t enough, financial stocks worldwide are taking a beating today. Fears continue that banks have too much debt and not enough capital. In Britain, a leading politician is suggesting a solution to the crisis there: Nationalizing two of the U.K.’s biggest banks. From London, Stephen Beard reports.
Stephen Beard: Lawmaker John McFall says the Royal Bank of Scotland and the Lloyds Banking Group should be taken into complete public ownership. Taxpayers already own a big stake in both banks as a result of a rescue package.
But, McFall says, there’s a problem. The banks are torn between two conflicting aims: to make profits for their shareholders and to help solve the credit crunch by lending a lot more money.
McFall says if they’re fully nationalized, they could be ordered to pump a lot more credit into the system. He admits there are dangers. Under government control, these banks might lend unwisely. But, he says, the recession is deepening at such an alarming rate, that nationalization is a risk worth taking.
In London, this is Stephen Beard for Marketplace.
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