What happens if bank share prices keep falling?
The authorities will be concerned that confidence in the banking system has been eroded and that savers will be spooked enough to start withdrawing their deposits. This was one of the anxieties in relation to HBOS in September when a rescue takeover by Lloyds TSB was orchestrated by Gordon Brown, and Bradford & Bingley which was rescued at the end of September. This time, savers should have less to worry about as the government has moved to guarantee deposits of less than £50,000 and the banks are insisting they are not seeing outflows of funds.
And your point is?
Never mind, we may be about to find out exactly what happens if bank share prices continue to fall ...