In light of the dramatically fragile situation of Britain’s banks, the Government has announced a second bailout for Britain’s banks.
Barclays bank has shown an interest in the newly presented bailout plan and admits it will likely participate. The Royal Bank of Scotland, RBS, has announced it could face losses of up to £28 billion for 2008 from rising bad debt and writedowns. Other banks like HSBC has declined any need for government money and amid the global economic storm, it’s website boasts how: “HSBC continues to exhibit strength despite continued market turbulence”. Lloyds Banking Group and Northern Rock are among the big banks still negotiating terms and conditions of this second UK banking bailout.
In an attempt to bring liquidity to the UK banks and protect them from disaster, the Treasury’s plan will insure banks against any risk on their balance sheet, including residential mortgages and leveraged loans. The move is rather bold and could backfire with dramatic damages to the economy.
Image by dominicspics under Creative Commons.
Related news articles:
