British bank executives have discussed selling shares to the government with Alistair Darling, the BBC's finance editor has claimed.
Three British banking giants have been in talks with the government about the purchase of preferential shares, the BBC reports.
According to a blog post from the broadcaster's finance editor, Robert Peston, representatives from RBS, Barclays and Lloyds TSB met with Alistair Darling yesterday. Part of the discussion is understood to have centred on public money being used to buy up considerable stakes in the banks.
This move would be likely to boost confidence in the financial institutions, whose share prices have weakened disastrously over recent days as the credit crunch worsens and access to wholesale funding dries up. RBS has suffered particular strain, with its stock trading down by as much as 30 percent this morning.
Insiders told Mr Peston that the bankers were disappointed that the chancellor did not give them his "fully elaborated rescue plan" for the at-risk financial sector. Accordingly, Mr Darling was reportedly told to "pull his finger out" and "finalise" how much public money he was prepared to put into the firms.
"The three banks estimate that they may need around £15bn of new capital each, with £7.5bn paid up front and a further £7.5bn guaranteed by the Treasury that would be delivered if it became necessary," Mr Peston wrote.
"Current rough estimates are that the capital injection could be as much as £50bn in total for all British banks."
