UK launches toxic asset insurance for banks
Leading with RBS, the UK government announced its long discussed asset reconstruction scheme, which will see affected banks putting toxic assets in a ‘ring-fenced’ bad bank.
By Sudeshna Sen, ET Bureau |
Leading with RBS, the UK government announced its long discussed asset reconstruction scheme, which will see affected banks putting toxic assets in a ���ring-fenced��� bad bank.
The asset reconstruction scheme envisages the UK government insuring up to GBP 500 billion in toxic assets. Lloyds TSB, due to announce its results on Friday, is also expected to take part in the scheme, though others like Barclays and HSBC have not yet resorted to any government assistance.
Any bank with assets over GBP 25 billion in ���eligible��� assets can join the scheme which is expected to run for 5 years. However, terms of joining the scheme are likely to be individually negotiated with each bank depending on circumstances.
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