The interest is double to the British authorities

London wants to save its banking sector. At any price. Thus new support measures granted to Royal Bank of Scotland (RBS) go much further than expected. Because RBS had beautiful display, yesterday, the highest loss ever recorded by a firm British is 24.1 billion pounds , person does illusion: there is still much to come back...

That is why, in the early morning yesterday, the Treasury and the leaders of the Scottish giant began agreed on a scheme to allow the Bank to maintain little or roughly the level of own funds, even in the face of severe turbulence. This requires the establishment of a broad "insurance disaster" device, as described Stephen Hester, the Director General of the Bank, together with an injection of public capital can go up to 21 billion pounds.

Financing of the economy

An equivalent plan could be announced for Lloyds Banking also presents its annual accounts. The interest is double to the British authorities. They hope to lead the return of confidence around the banking system. And are, in exchange for this aid, the big banks take a legal commitment to support the economy of the country.

So, yesterday, RBS has promised to grant the year next to 25 billion pounds of additional credits to businesses and real estate borrowers, and 25 billion pounds the following year. And Stephen Hester also clarify that RBS had originally proposed a lesser amount of assets to be placed under Asset Protection Scheme but that the Government intended to increase the "power of fire" for the financing of the economy.

In the meantime, the Edinburgh Bank will seek to extinguish the fire that has ravaged his books, insulation in its balance sheet for 325 billion pounds of toxic assets (i.e. 15 of its assets excluding derivatives). The Bank will keep for her loss induced by these credits and other portfolios of derivatives up to 19.5 billion pounds. Beyond this amount, Treasury will bear 90 of any losses.

This is not a nationalization

The threshold is "remarkably low", commenting on the Credit Switzerland analysts who see the taxpayer sought in two years. In addition to its commitment to boost the supply of credit, RBS will pay in exchange for this insurance 6.5 billion pounds, or 2 commission on the amount of isolated assets. But the Bank waives the deficit tax reports, the "double" the cost of protection recognizes Stephen Hester. The 6.5 billion of premium will be paid in securities for the benefit of the Treasury. In addition, he was already prepared to remaining the responsibility of RBS losses in capital: 13 billion program is already programmed, with an option on 6 additional billion. So far, the British authorities brought 20 billion pounds to l'ex-deuxième Bank of the country, in exchange for a taking up to 70. New contributions will be through actions essentially without voting rights. Will "voting rights not exceed 75 ", Paul Myners, assured the Treasury. However, the taxpayer should arrogate to a much greater share of RBS in terms of economic interest. Officially, Revel, is still not a nationalization.