RBS in more trouble

The RBS bank, the second largest in the UK, has revealed that it is facing losses of £28 billion for 2008 as Mr Bean prepares to hurl billions more at the banks in a second bail-out, the first having failed.

The eventual full loss suffered by RBS during 2008 could actually reach a staggering £45 billion when various other factors are finally taken into consideration, such as its purchase of other banks.

And it is the taxpayer who will end up footing the bill, and for many years to come.

It would appear that many banks, despite being the recipients of huge amounts of bail-out money, have not been fully disclosing the true extent of their debts and general financial status.

With the latest bail-out, the government will have committed almost £1,000 billion of taxpayer money to resolving the crisis in the banking sector, and with no guarantee of success.

Both the Chancellor, Alistair Darling, and Gordon Brown have denied that the latest proposed measures actually mean they are effectively writing a blank cheque to the banks using taxpayers’ money, but admit that no limit has yet been fixed.

If it looks like a duck, walks like a duck and quacks like a duck…… Isn’t that a blank cheque?

At the end of the day, if these proposals go through, the government will end up with a 70% stake in RBS.

On the bright side, Barclays and HSBC have so far resisted the temptation to receive government ‘funding’, and HSBC have gone so far as to state that they cannot envisage a situation where such action would be necessary. They’ve obviously been a bit more careful!

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