Banks could have to shed 10% of customers as price of state aid - papers

The European Commission wants Royal Bank of Scotland to sacrifice up to 10 per cent of its small business customers as the penalty for receiving billions of pounds in state aid.

RBS, which is 70 per cent state controlled, would have to give up about 100,000 of its one million small business customers under the plan. RBS, which controls about one third of the market, is resisting Brussels' proposal and wants to cap its divestments at a significantly lower level, reports The Times.

Lloyds Banking Group, 43 per cent owned by the taxpayer, is under pressure to shrink its share of personal accounts, where it is the No 1 player with 22 million customers. Some sources have suggested that Brussels also wants a 10 per cent cut at Lloyds, which would equate to just over two million personal account holders. See story...

Criticising Labour's "cynical and limited" approach, Mr Cameron promised a "comprehensive" package of changes at the party's conference in Manchester, including bringing forward a rise in the basic state pension age and curbs on public sector salaries according to The Telegraph.

Mr Cameron told Radio Four's Today programme: "When it comes to getting the public finances under control, there are not any popular choices."

In a separate interview on BBC1, he said: "Some of these decisions are unpopular and they're not always going to go down very well but they are necessary." See story...

In the most profound financial change in recent Middle East history, Gulf Arabs are planning - along with China, Russia, Japan and France - to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar reports The Independent.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years. See story...