"The Treasury has announced that we as taxpayers will provide insurance to Royal Bank against future losses on £325bn of loans and investments.
First losses of up to £19.5bn on those impaired assets will be taken by Royal Bank.
But to prevent the losses wrecking the bank, we as taxpayers will be injecting up to £19bn of new capital into it, in the form of non-voting shares.
Also, losses greater than £19.5bn will be born by us - by taxpayers. In a prolonged severe recession, those losses could be substantial.
What we're getting in return is a £6.5bn fee - in the form of yet more of these non-voting shares.
And RBS has given a legally binding commitment to increase lending by £25bn in 2009." After days of wrangling between the Treasury and the bank, the final terms seem quite favourable to RBS. The overall £325 billion figure is certainly larger than expected; while, to my knowledge, the 'first loss' and 'fee' figures are lower. It just goes to show how desperate the Government is to get banks lending again, and you can expect a similar set-up to be announced for Lloyds sometime over the next couple of days. It'll be nice - and surprising - if it all goes to plan. But if it doesn't, the taxpayer's in for a vicious fiscal kicking.