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New EU laws may see RBS and Lloyds broken up

Both RBS and Lloyds Banking Group have sent proposals to the European Commission that could see the banks restructured and reduced to fit with new laws.

On Wednesday, the EU Commission released new rules with regard to European banks that have been bailed out by their governments. It demands that all banks submit plans for reprivatisation as well as proof that the state aid has not created a false competitive advantage.

The rules say: “Criteria has been established to delineate the conditions under which a bank may need to be subject to more substantial restructuring and when measures are needed to cater for distortions of competition resulting from aid.”

The EU is also demanding that the bailed out banks stress test their assets so as to prove long-term viability of the businesses.

Today’s reports suggest this may mean that the part-nationalised UK banks may have to wind down or even sell parts of their business. RBS has already signalled that it is looking to sell its Asian arm, and Lloyds may have to sell or wind down some of the assets bought from HBOS.

Last month, at the British Bankers Association conference in the City of London, European competition commissioner Neelie Kroes said: “The need for competitive market structures is stronger than ever; the likelihood of significant divestments by RBS and Lloyds is strong.”

The new rules also demand that the sale of a fully nationalised institution must not distort market competition through a merger. This may hinder the Government’s plans to sell Northern Rock to an existing UK bank or building society and may favour potential reported interest from both Virgin and Tesco.


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Health Secretary Andy Burnham has unveiled the Government’s Green Paper for adult social care and called for a dignified debate into the fate of Britain’s elderly.


Turner says SEP fee increases are a “one-off”

FSA chairman Adair Turner says that FSA fee increases are a one-off and the industry will not face further rises for the supervisory enhancement program in the future.

A fund in top form

A key issue for many clients remains boosting their income. For many, this has been at least partly satisfied by holding corporate bond funds, which, after a very poor 2008, have come back quite strongly.

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Pension Wise — now taking calls…

Those with decent-length memories will recall that in the 2014 Budget statement George Osborne announced the new (and entirely unexpected) pension freedoms. The new rules come fully into force in less than two weeks.


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