BY THE middle of this week we will know how much capital Royal Bank of Scotland requires from the Government and from existing shareholders and whether it will send the shares up or down. Beyond that, we're still awaiting a lot more detail. And detail will prove vital in the coming days.
And it will be days, or even hours. This story is moving so fast we need answers quickly to settle everyone down. Never before have governments reacted so quickly, apart from during times of war, and I have mentioned to several people this week that
covering this story is like reporting on a world war, with fronts opening in all corners of the globe.
The events of the past few weeks have thrust us all into new territory, seeking out answers to questions that have never previously been asked. There is talk of Armageddon, meltdown, call it what you will. There is undoubtedly panic and hysteria, and that's why we now need detail, as a lack of detail creates a vacuum that is filled with speculation.
When Alistair Darling addressed Parliament last Monday he gave us a broad sweep of his plans, offering a few assurances but not enough to make anyone feel confident that he was really on top of the job. The markets bombed.
George Bush stepped out onto the White House lawn on Friday amid expectations that he would suspend trading on the New York Stock Exchange. But he said nothing of substance, apart from blessing all Americans. He turned his back on the media, declining to take questions, and left everyone wondering what was going on. The markets bombed again.
Platitudes never work in the best of times. At least the UK Government has shown some leadership, providing a package that was well received and is being plundered by the US as part of its own solution.
But it's still only a start.
We need to know more about the conditions that the banks will need to meet in the new world order. Should they sign up to a social charter, as proposed by Resolution's Clive Cowdery, that commits them to avoiding repossessions and promising to provide loans to low-income families?
We need to know what the coupon – or interest rate – will be on the preference shares to be invested in the banks (the word is 9%-12%]. We need the Financial Services Authority to come up with firm recommendations on executive pay.
Hector Sants, the chief executive of the FSA, will be in Scotland this week and is expected to face some tough questions, or at least we are promised some tough questions. As one cynic said to me last week, the Edinburgh audience will probably revert to type and politely ask if he's had his tea before adjourning to the golf course. With Scotland's financial services industry facing its toughest test, this is not the time to be dancing around the issues.
Sants is a central figure in providing solutions to the crisis, and this is Scotland's chance to let him know how important this industry is to the country.
The contagion that has spread from the US to Iceland, Germany and Japan is in danger of engulfing Scotland. Already we look certain to lose one banking headquarters. We cannot afford to lose another or be shunted to the fringes of the financial services industry.
RBS may not be on everyone's Christmas card list, but it simply has to survive the crisis and remain independent.
The Treasury is expected to appoint private equity firm Blackstone to advise on the detailed negotiations.
It would join UBS and JP Morgan Cazenove, which helped the Treasury form its bailout plan. NM Rothschild is another that would be considered independent.
As usual, they will earn millions for their advice, but if it works it will be worth it. Time is now a valued commodity, so much so that if it was tradeable, it would have soared.
We have to use it productively to get ahead of the markets and hope that an injection of confidence, and a further cut in interest rates, will bring down the interbank lending rate that is key to a lot of the above. Without another round of supportive measures this weekend – and weekends have been the time for key developments – investors will again be exposed to volatile markets when they open tomorrow.
The G7 meeting in Washington has never faced a more critical agenda, or a bigger need to act quickly, and we cannot predict with certainty what the next 24 or 48 hours will bring.
By the time that RBS asks for its extra handout on Tuesday the world could be a different place.
