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MLex Comment: UK banking policy could spell trouble for the Treasury

By Sebastian Chrispin ( November 26, 2009, 09:00 GMT | Comment) -- The UK Treasury announced that Royal Bank of Scotland and Lloyds Banking Group must each make a series of divestments in return for further capital injections from the government in the name of increasing competition. The government hopes this will increase competition on the banking market, but putting strict conditions on the potential purchasers of those assets may not achieve that goal.The UK Treasury announced that Royal Bank of Scotland (RBS) and Lloyds Banking Group (Lloyds) must each make a series of divestments in return for further capital injections from the government in the name of increasing competition. The government hopes this will increase competition on the banking market, but putting strict conditions on the potential purchasers of those assets may not achieve that goal....

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