INSTANT VIEW - Bank shake-up, record cash call for Lloyds

LONDON (Reuters) - Lloyds Banking Group launched a record 13.5 billion-pound rights issue on Tuesday and along with rival Royal Bank of Scotland has agreed to sell off businesses as part of a complex deal to further boost capital while also meeting EU competition concerns over state aid.

The Treasury said Lloyds and RBS would between them have to sell off businesses equating to 10 percent of the retail banking market to satisfy the competition concerns.

GORDON BROWN, PRIME MINISTER:

"Our aim is that it is not the British public that is financing the banks, but that the banks repay money to the British public and we take another step down that road today. "We are creating more competition in banking, making sure that our banks are built on a more solid basis. We have been able to reduce the liability that we have for the insurance of some of the major banks in this country and we are going to see benefits to the taxpayers."

ALISTAIR DARLING, CHANCELLOR:

"If we didn't do any of this and the banking system collapsed you would be talking about complete chaos.

"One of my priorities is to make sure the taxpayer does get its money back. I would like to see us get as much money as we possibly can and I hope that we will do and if you look at the fees we are charging, they are very, very substantial."

(...)

Darling said he would like to see new entrants to the market: "particularly in relation to mortgage and small and medium sized businesses.