The Great Debate UK
Talk about hitting the ground running. Even though he doesn't formally take charge until next month Win Bischoff, chairman-designate of Lloyds, is reported to be pressing for the bank to raise up to 15 billion pounds through a rights issue and to scale back its participation in the government's Asset Protection Scheme (APS).
His intentions are to be applauded. But regaining some independence will not come cheap for Lloyds shareholders, and substantial government support will still be needed.
The world has changed since the APS was launched on March 8. It prevented the collapse of the UK banking system, while stopping short of full nationalisation.
At the time, Lloyds agreed to submit assets worth 260 billion pounds -- a quarter of its entire loan book -- into the scheme. After absorbing the first 25 billion pounds of write-downs on the loans, the government would absorb 90 percent of any further losses.