G20 rules could fuel further bank bailouts
9 September 2009 | by The Retail Bulletin“If the outcome from G20 is a clear decision that bank capital must take the form of equity and E urope takes prompt action to implement that decision, the likely consequence is that holders of bank hybrid capital will be compelled to exchange that capital for equity. This could affect UK government stakes in UK banks, as well as holders of hybrid capital in banks elsewhere in Europe. Further state bailouts are only likely to follow if banks are required to hold increased capital. This is not currently on the table, although it will come up for discussion as soon as markets ease allowing banks to bolster their balance sheets by revaluing their existing assets upwards.”
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