INSTANT VIEW: UK banks to take $64 billion in government funds

LONDON (Reuters) - Three major British banks could take 37 billion pounds ($64 billion) in government money to boost their capital, the British government said on Monday.

Royal Bank of Scotland will boost its capital by 20 billion pounds, while LLoyds TSB and HBOS, who announced revised terms for their planned merger, will take 17 billion pounds between them.

Barclays is not taking government money but said it would raise cash from investors and not pay a final dividend.

PRIME MINISTER GORDON BROWN

"I spoke to President (George W.) Bush last night after returning from Paris and we agreed the common ground for action in our two continents.

"I believe that only by global action can we fully restore the confidence that is needed and build the international financial order. And I will put forward proposals for major reform of the international institution at a speech in the City (of London) later this morning."

JONATHAN LOYNES, CAPITAL ECONOMICS

"The injections into some banks like RBS and HBOS are big enough to mean that it is very likely that they will be treated as fully nationalized for the purposes of the public accounts, thereby adding their liabilities, less liquid assets, to the published level of public sector debt. This would push the debt to GDP ratio well above 100 percent.

"... public borrowing and debt are already set to rise sharply as a result of the slowdown in the economy already seen. These extra developments merely increase the likelihood that, at some point in the future, very heavy tax increases or spending cuts will be required to get the public finances back into a sustainable position."

GOLDMAN SACHS ANALYSTS

"The coordinated European response to the credit crisis presented on Sunday evening should be positive news for the European banks sector, in our view, as it addresses the central issues of both capital and funding in a comprehensive way.

"On a more systemic level, the scope of the government intervention should send a strong signal to market participants and pave the way for lower systemic tail-risk.

KEITH BOWMAN, EQUITY ANALYST, HARGREAVES LANSDOWN

"Confidence in the banking sector has been shaken to its roots, with the result that government's traditional role as lender of last resort and back stop to the financial sector is being implemented on a scale unimaginable just weeks let alone months ago.

"It is still too early to appreciate the ramifications of these moves. However, for now, the hope is that today will mark a watershed, with vast measures of government reassurance finally rekindling some confidence in the shattered banking sector."

FINANCIAL SERVICES AUTHORITY