Meet the New Top Bankers: You

Get accustomed to this bit of news breaking out of London this morning: taxpayers are now the biggest shareholders in the nation's top banks. Under an historic (though probably not the last) £37 billion ($63 billion) bailout formally unveiled this morning, the U.K. government will be injecting a lifeline of cash into three of the country's largest retail banking groups: Royal Bank of Scotland (RBS), HBOS and Lloyds TSB. "The plans mean taxpayers will own about 60% of RBS and 40% of the merged Lloyds TSB and HBOS," the BBC reports. A fourth bank, Barclays (pending owners of a big chunk of Lehman Bros.), said it will seek up to £7 billion in a private capital raising round to shore up funds and thus forego funding from the aptly named Reconstruction Fund, the Financial Times reports. There is a scalp to report: RBS CEO Sir Fred Goodwin is "to go in Super Monday bail-out", the Daily Telegraph writes.

Germany, too, is marshaling 400 million euros in taxpayer funds to shore up the country's banking system, the Wall Street Journal reports, "the latest in a series of aggressive government moves that are remaking the world's financial system with lightning speed." It doesn't end there: Australia and the United Arab Emirates also announced plans to guarantee deposits and France and Italy were set to announce their own plan today, says the Journal. And the United States? Yes, Treasury Secretary Henry Paulson "is speeding up consideration of guaranteeing debt issued by banks after a similar move by European policy makers, according to a U.S. official briefed on the matter," Bloomberg reports this morning.

Lest you think central bankers had a restful weekend, this just in: The Bank of England, the European Central bank, and the Swiss National bank announced yet another coordinated effort to pump liquidity into the global banking system. "They will offer unlimited U.S. dollar funds to banks," the WSJ reports. The Bank of Japan is mulling a similar move. The central banks' moves and the super Monday bailout, to borrow the Telegraph's line, has reinvigorated investors. Markets in London and Paris opened more than 5 percent higher, while much of Asia was in the black, too, the BBC reports.

"No more Lehmans." That, according to BusinessWeek, is the vow coming from IMF and G-7 chiefs after a weekend of talks in Washington on how to keep a global financial crisis from turning into a global catastrophe. In an effort to calm jittery banking officials and investors, the Western leaders promised the following: "No more Lehman Brothers-like failures of major financial institutions will be allowed. All bank deposits will be guaranteed. The banking systems of the G-7 nations will be flooded with almost unlimited liquidity. And if all that fails, any other tool—regardless of how economically unorthodox—will be used if needed," BusinessWeek writes.

Meanwhile, across town, Treasury officials were doing their best to keep Morgan Stanley's white knight investor from walking away from buying a 21 percent stake in the firm. According to the New York Times, Treasury officials strongly assured Morgan Stanley's Japanese funding savior—Mitsubishi UFJ Financial Group (MUFG)—that its $9 billion investment in the once-mighty Wall Street player will be protected. The Treasury's reassurance came after "two days of tense negotiations" between the firms. The deal is seen as "a crucial step in the government’s strategy for revitalizing the financial system by luring outside investment while it considers buying stock in banks directly," the NYT reports.

Even with such high-powered help, MUFG wants to sweeten the terms to include only convertible preferred shares and no common stock, Reuters reports, citing a source in the know. Bloomberg's William Pesek, writing from Tokyo, is skeptical, even at this late stage, the deal will go through at all. One bank that is having no discernible trouble with the meltdown in the financial sector is Spain's Banco Santander. According to the NYT, the Spanish lender is about to buy up Sovereign Bancorp for $2.5 billion, citing "people briefed on the matter." The stricken S&L has been hit hard by bad home mortgages and appears unable to make it on its own or raise cash on its own, the NYT reports.

And now to Detroit, where the news is just as grim. Troubles in the decimated American auto sector is forcing General Motors and Chrysler to consider an historic tie-up. "The Motor City spent the weekend considering the once-unthinkable prospect that its traditional Big Three automakers might shrink to the Big Two," the NYT reports. Winning the blessing of the GM board may not be so easy, the WSJ writes. The problem? The board remains divided on the merits of merging with Chrysler and its potential to salvage cash-strapped GM's fortunes. The Detroit Free Press says the odds of the GM-Chrysler deal going through are "as high as 50%," but the ultimate indicator will come when the opening bell rings next. Analysts are dubious. "You've got GM, who most people think is on the verge of bankruptcy in the not-so-distant future, given their cash position. And then taking on Chrysler at this point—I just don't know if the market is going to look at that favorably, unless there is something more under the surface," Erich Merkle, an analyst from Crowe Horwath LLP, tells the newspaper.

And, finally, at least things are looking up for Prince Alwaleed Bin Talal. Forbes reports the billionaire Saudi investor—ranked as the 19th richest man in the world by Forbes—is planning to build the world's tallest skyscraper for a planned city outside of Jeddah. How high? The $1.3 billion Kingdom Tower, as it is to be called, "will be taller than 3,280 feet—but the prince isn’t saying how much taller," Forbes writes. The secrecy is important. In the race to build the world's tallest tower, a Middle East obsession now, Dubai developer Nakheel is also planning a tower of more than 3,280 feet for Dubai.