European banks bent on more capital

Now this is eye popping: Royal Bank of Scotland has announced a $24 billion sale of stock, the biggest offering in British corporate history, according to the AP. The new capital is sorely needed to provide a cushion in the wake of extensive mortgage-related losses. The bank has said it will write down close to $12 billion. Ouch! Other British banks will do the same, joining their American brethren, notably Citigroup, Merrill Lynch and JP Morgan Chase. But $24 billion? This will be seen a humiliation by many, especially after its historic purchase of ABN last year. The terms on the RBS deal will be interesting. Lots of preferred shares issuers have been offering souped-up yields, ensuring not shortage of buyers.  

For more:
- here's the AP article

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