U.K. Banks should stay in private hands says Alistair

European bankers and finance ministers must have been laughing into their fettuccine at the recent G-7 conference in Rome. And what brought tears of laughter into their eyes? A statement made to the press by U.K’s. Chancellor of the Exchequer Alistair Darling saying that British banks are “best run” when in private hands and it would be better if they never came under state ownership.

The statement came as a reply to questions from the press in anticipation of an expected announcement from the Lloyds Banking Group regarding the fortunes of their recently acquired HBOS Plc, who have lost 10 billion pounds during trading in 2008.

Meanwhile indications remain strong that the light at the end of the tunnel remains the size of a pin head came as the Royal Bank of Scotland announced that they were about to embark on a massive efficiency drive that could see up to 20,000 jobs being cut worldwide, with more than two thousand in the UK.

RBOS, 68% taxpayer owned, is also due to officially report losses of up to £28billion, which makes for the biggest loss in UK corporate history, when it announces trading results for 2008 towards the end of February 26.

All in all it hasn’t been a great week for Government leaders with Prime Minister Gordon Brown’s already tarnished reputation as a financial guru being placed under further stress with a warning from leading UK businessman that the government will needs to borrow at least a further £100 billion to prevent the economy from spinning totally out of control.

This series of warnings expect to be further compounded when a report the Office of National Statistics is released towards the end of this week. The report is expected to state that tax revenues for 2008 will show a with a £65 billion deficit for 2008. With falls in comparative revenue especially low in November and December 2008, the picture for 2009 looks especially grim.

Economic outlooks predict that in order to keep pace with revenue deficits and injections of capital to keep state owned enterprises afloat, the UK Government will need to borrow close to £150 billion in 2009, almost £30 billion more than predicted by Chancellor Alistair Darling, with the same shortfall in tax revenue expectations occurring in 2010.

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Tags: Alastair Darling, Bank, Banking, British Economy, Economics, Economy, Financial News, Gordon Brown, Recession, UK Banks