Today’s yet another downturn milestone. As RBS announces the largest annual loss in UK corporate history, the Treasury’s set to make the bank the beneficiary of what could be the biggest bailout so far. Robert Peston sets it out thus:
“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
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