The proposed break-up of Royal Bank of Scotland and Lloyds Banking Group follows years of financial turmoil. Here is a timeline of some of the key events:
MARCH 1, 2007: RBS, which owns NatWest and Churchill Insurance, unveils sharply higher annual profits of £9.19 billion.
LATE JULY/EARLY AUGUST 2007: The credit crunch starts in earnest as banks stop lending to each other due to market fears over exposure to potential losses on high-risk US mortgages.
SEPTEMBER 2007: A dramatic run on Northern Rock sees customers queuing outside branches to withdraw their savings.
OCTOBER 8, 2007: An RBS-led consortium clinches victory in the battle for ABN Amro, after rival Barclays withdrew from the race, but some City commentators raise concerns over the price - 71 billion euros (£49.1 billion).
DECEMBER 10, 2007: Lloyds TSB says the credit crunch has cost it £200 million so far as fall-out from the turmoil continues to weigh on the banking sector.
FEBRUARY 22, 2008: The transfer of Northern Rock to public ownership is completed after Chancellor Alistair Darling signs off its nationalisation.
FEBRUARY 28, 2008: RBS is one of the worst-hit UK banks by the credit crunch, writing off £2.5 billion from investments - but still reports a rise in annual profits to more than £10 billion.
APRIL 22, 2008: RBS asks shareholders to pump in £12 billion of new capital under the biggest rights issue in UK corporate history, as it unveils another £5.9 billion of credit-crunch write downs.
MAY 6, 2008: Lloyds TSB reveals a further £387 million hit from the credit crunch, but signals there will be no need for a cash call to investors.
AUGUST 8, 2008: RBS reports pre-tax losses of £691 million for the first half of the year - its first loss in 40 years as a public company.
SEPTEMBER 7, 2008: The US Government is forced to step in to shore up Fannie Mae and Freddie Mac, the financial giants which own or guarantee more than five trillion dollars (£2,800 billion) in mortgages.
SEPTEMBER 8, 2008: City traders hoping to cash in on a worldwide stock market boom triggered by the bail-out are left angry and frustrated after a computer crash paralyses the London Stock Exchange for seven hours.
SEPTEMBER 9, 2008: Fears mount over the future of US investment banking giant Lehman Brothers as its shares plummet to their lowest level on Wall Street in more than a decade.
SEPTEMBER 15, 2008: Lehman Brothers files for bankruptcy, sending stock markets into freefall and leaving thousands of workers facing the axe.
Fellow US investment bank Merrill Lynch - another victim of heavy losses linked to the US housing market - is bought by Bank of America in a deal worth 50 billion US dollars (£28 billion).
Meanwhile, Manchester United's embattled sponsor American International Group (AIG) is granted a 20 billion US dollar (£11.2 billion) lifeline.
SEPTEMBER 16, 2008: London's leading shares plunge to a three-year low as markets endure a second day of turmoil in the aftermath of the Lehman Brothers collapse. The FTSE 100 Index falls 3.4% as investors continue to head for the exit.
Meanwhile, the Bank of England pumps a further £20 billion into frozen money markets as banks fearing losses hike inter-bank lending rates.
Shares in AIG fall another 63% on Wall Street as concerns grow it will need more money to survive the fall-out from the demise of Lehman Brothers.
Halifax Bank of Scotland (HBOS) seeks to reassure investors over its funding, but fails to prevent its shares slumping for the second day in a row, closing 22% lower.
SEPTEMBER 17, 2008: HBOS confirms it is in "advanced talks" over a merger that would create a £30 billion banking giant with nearly a third of the UK mortgage market.
At one point, before the merger speculation broke, the HBOS's share price was 50% lower at 88p, less than a third of the value first thing on Monday morning.
OCTOBER 13, 2008: A £37 billion taxpayer lifeline is thrown to three of the UK's biggest banks in a bid to end the sector's turmoil, with the Government to take stakes in RBS, Lloyds TSB and Halifax Bank of Scotland under the historic plan.
Sir Fred pays the price for the biggest banking bail-out the UK has ever seen, stepping down after being forced to rely on £20 billion of taxpayer funding to shore up his bank.
NOVEMBER 28, 2008: The rescue plan means taxpayers now have a 57.9% stake in RBS after investors snubbed its £15 billion share offer, leaving the Government to buy up the unwanted shares.
JANUARY 19, 2009: Lloyds TSB takes over the ailing HBOS to become Lloyds Banking Group in a move creating a new UK "superbank".
Shares in RBS collapse as the bank estimates bad debts and write-downs on the value of past acquisitions, notably its share of ABN Amro, could leave it as much as £28 billion in the red for 2008.
It also takes a step closer to full-blown nationalisation after the Treasury agrees to replace £5 billion of preference shares with new ordinary shares, increasing its stake in the bank to 70%.
FEBRUARY 5, 2009: Reports emerge that RBS is preparing to make bonus payouts to thousands of the firm's senior bankers and traders, sparking a row over whether a bank propped up by taxpayers' money should do so.
FEBRUARY 8, 2009: Chancellor Alistair Darling announces a review of bank practices amid condemnation of a reported £1 billion bonuses package planned by RBS, which is being propped up by £20 billion of public money.
FEBRUARY 10, 2009: The former heads of Royal Bank of Scotland (RBS) and HBOS - Sir Tom McKillop and Lord Stevenson of Coddenham - apologise for the "turn of events" that led to their banks being bailed out by the Treasury.
FEBRUARY 26, 2009: Royal Bank of Scotland announces pre-tax losses of £24.1 billion for 2008 - a new UK record.
FEBRUARY 27, 2009: Lloyds Banking Group - which is 43% owned by the taxpayer - reports pre-tax profits of £807 million for 2008, 80% below the previous year.
APRIL 14, 2009: Hopes of a turnaround in the battered banking sector sends bank stocks soaring higher after better-than-expected profits from US giant Goldman Sachs. Shares raced as much as 13% ahead as the London market resumed trading after the Easter break.
MAY 7, 2009: Banking giant Barclays posts a 15% rise in pre-tax profits but part-nationalised rival Lloyds Banking Group says it is still on course for losses this year.
MAY 17, 2009: Lloyds chairman Sir Victor Blank - who brokered the rescue takeover of HBOS - announces he is to stand down amid mounting criticism over the acquisition.
MAY 19, 2009: RBS and Lloyds Banking Group extend share gains amid speculation the Government is already sounding out buyers for its state-owned stakes.
JUNE 11, 2009: Government agreements to wipe "toxic assets" off bank balance sheets are expected to be reached this summer, City minister Lord Myners says.
JULY 8, 2009: Chancellor Alistair Darling pledges a crackdown on "irresponsible" bank pay - but his financial reform plans came under fire for not going far enough.
AUGUST 3, 2009: Barclays and HSBC bounce back from the near-collapse of the financial system to report combined half-year profits of almost £6 billion.
OCTOBER 28, 2009: European Commission approved plan to split Northern Rock into "good" and "bad" banks.
NOVEMBER 1, 2009: Three new high street banks are to be set up as part of a major shake-up by the Government.
© 2009 The Press Association Limited
