Banks line up for first draw-downs

The first draw-downs from the Government's multi-billion-pound financial rescue package for high street banks will begin early this week with Royal Bank of Scotland and Barclays set to be first in line.

HBOS and Lloyds TSB, engaged in merger talks, are expected to follow with the unprecedented move making the Government the biggest shareholder in at least two banks.

The scale of the fundraising could prompt the suspension of trading at the London stock market to give time for the market to digest the scale of the information and its impact.

BoE governor Mervyn King has told the banks to ask for more than they need to make sure their capital position is strengthened sufficiently to withstand a long recession. Further capital is also available and the Treasury has increased the amount available to £75bn.