As you'll no doubt have seen or heard, this morning's breaking news surrounds further financial stability measures for Lloyds Banking Group and Royal Bank of Scotland and their participation in the Government's Asset Protection Scheme (APS) which aims to protect banks from the full effect of 'toxic' loans.

It has far-reaching implications for you and me and means yet another major bank shake-up.

The government claim this means a significantly reduced risk for the taxpayer, but what do you think? Is this good news? Will it mean increased competition in the banking industry? Will you and I see any benefit?

In summary:

Lloyds Banking Group
Lloyds, 43% of which is already owned by the taxpayer, has managed to avoid entering into APS but at a cost: it will have to pay the Government £2.5bn to simply avoid the scheme, sell-off 600 branches including the TSB brand and sell the Cheltenham and Gloucester mortgage brand and the online Intelligent Finance brand. They will also raise a further £21bn from a rights issue 'swapping' debt for capital.

Royal Bank of Scotland
RBS, unlike Lloyds, will enter APS - meaning £282bn of its assets will be insured by the taxpayer. There are other serious implications for the bank: it will cost them £700m per year to participate in the scheme and cost £2.5bn to leave. The government's stake in the bank will increase to 84.4% (although its ordinary shareholding remains at 70.3%). Over the next 4 years, RBS will sell its RBS branches in England and Wales, its NatWest brand in Scotland, RBS Insurance (including Direct Line, Churchill, Green Flag and Privilege), and its card payment company, Global Merchant Services.

Clare Francis analyses this in more detail in her article ‘What will the bank break-ups mean for you?'

Does this worry you and leave you concerned about the state of the taxpayer's involvement and the implications for the economy? Do you work in the banking industry and will be directly affected by these measures? Click reply to share your thoughts and have your say...