(LLOY.L) Lloyds Banking Group PLC Buy/Sell

LBG are intending to raise £13.5BN from a rights issue. LBG have to pay HMG £2.5BN for a fictious APS.

I beleive LBG were blackmailed by the Government into paying this Extortionate amount in order that HMG would free them to leave the APS and raise capital from its existing shareholders, this is illegal.

Any discount we shareholders would have received from this RI has been gobbled up by the £2.5BN paid to HMG, which constitutes as 18.5% of the total RI.

Therefore is LBG did not have to pay for insurance they did not receive, possibly the RI could have been in the amount of (£13.5bn - £2.5bn) = £11.5bn, which is what was originally estimated and reported.

HMG are desperate for money from anywhere they can extort to fill in the holes left by Labours financial incompetence whilst running the country. This Government will do anything whilst they are desparate and I fear most for the 16% of RBS investors where HMG have greater control.

If Gordon Brown and the Labour government were genuinely concerned about the banking sector and how they can help repair the damage then they would not have charged LBG for an insurance scheme that they never had.

If they genuinely want LBG to stand on its own two feet for the betterment of the UK economy then they would have allowed the RI to go ahead without HMG involvement.

Currently the RI capital raising consists of HMG £5.8bn / Public Invetsors £7.7bn.

Now if HMG let LBG go it alone and did not charge them £2.5bn then they could have raised £11.5bn in the market, allowing LBG to step in the right direction.

For years Gordon Brown has been preaching light touch banking regulation and now he is going to the other extremity and putting shackles on the bank which will prevent them from recovery and consequently prevent the UK economy from recovering. I beleive the USA has got the balance right and US banks are being allowed to pay back Tarp whilst they can. The reason for this is that they know that banking is international and they want to give their banks the competitive eadge.

I do beleive Brown is preaching to other countries to supress there banks through more regulation, and then more regulation and they end bonuses and waive goodbye to their best staff, but behind his back they are taking no notice as they know they will become more competitive than British banks.

I look forward to the May 2010 general election so we can get rid of Gordon Brown and his Labour government.

I do beleive the Tories understand that the banking sector is core to the success of the British economy and it is therefore important to help the banks recover in any way they can. Not necessarily confident in Osborne but his advisers, Kenneth Clark and William Hague.