After a week of turmoil on the stock markets, new research from the financial information site DigitalLook.com has revealed the extent to which shareholders in UK banks have been feeling the pain.
The website has calculated that £148bn has been wiped off the value of banking shares in the past three years. Most of this value has disappeared since the summer of 2007 as the credit crunch has gone from bad to worse.
"This huge loss in the value of shares will largely be borne by pension funds, insurance companies and small private investors," said Andy Yates, director of DigitalLook.
"It will help force down pension payments and push up the cost of life, car and house insurance. Every bailout that leaves the shareholders in the cold is just going to add to that problem. There is nearly £10bn in market cap wiped from Bradford & Bingley and Northern Rock that isn't going to reappear."
The average UK pension fund has around 25 per cent of its investments in UK equities, and much of this is alloted to shares in banks. The worry, according to Mr Yates, is that the undermining of the banking sector will damage the Government's ambition for more Britons to fund their own retirement through the private pension system.
Similar research by DigitalLook back in September put the losses in banking shares at around the £130m mark. Since then, though, we have had the fallout from the nationalisation of Bradford & Bingley and the troubled passage of the wall Street bailout plan through the American Congress.Reuse content