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Britain attempts second bank rescue - insuring banks against big losses on bad assets

2009-01-20 03:56:39 (GMT) (Caymanmama.com - Banks & Banking World News News)

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British Prime Minister Gordon Brown

The U.K. is announcing a second attempt at a rescue plan for the country’s failing banking industry

Greensboro, North Carolina (CaymanMama.com) — The economic strife doesn’t stop at the U.S. Britain is knee deep in their own financial trouble as reports come in on Monday that the U.K. is announcing a second attempt at a rescue plan for the country’s failing banking industry.

According to USA Today, “Prime Minister Gordon Brown said the government will offer to insure banks against default on toxic loans in exchange for legally binding commitments to make credit more available to British businesses and home buyers who are struggling in an economic downturn.”

The announcement overlapped another report by the Royal Bank of Scotland stating its losses for the entire year could total much as 28 billion pounds ($41.3 billion), making it the largest loss ever by a British corporation.

Brown verified that the British government has raised its stake in RBS to nearly 70%, but would not state whether he thought the bank would ever be fully nationalized.

“Good businesses must have access to credit. Jobs should not be lost needlessly,” Brown told reporters at his Downing Street office. “It is because of this that we are taking the action to expand lending.”

Brown said invigorating the nation’s lending is imperative to help Britain’s economy and to try to limit job losses.



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