Banking on a good plan

What is going to happen to the banking sector? Banking shares are falling like a stone in a very dry well with Barclays seeming to be the worst hit and the thing is, a mist surrounds the reasons why.

All this has an implication for forex trading and spread betting, will the government announce tax charges on trading? Will financial sectors have to increase prices on investors dealing to draw in more funds?

We can only speculate on what the government has planned for us, will they take the US line and continue to try and spend their way out of recession or come up with other plans? The fact that they mooted the idea of a ‘toxic bank’ to harbour all the bad debt shows that the US model is preferred.

There seems little doubt that most analysts see bank lending as the key to reviving the economy. For those of us involved in spread betting and forex trading we can only hope that the government gets it right and that the pound starts to show some fight against other currencies.

If the government are going to try and ‘clean up the banks’ then what impact does that have on the pound? Surely recapitalisation would mean a fall in the pounds value?