Tuesday, January 20, 2009

Who Stole All The Money? RBS FLAILING

Royal Bank of Scotland driven to the brink of nationalisation

Royal Bank of Scotland, one of Britain's biggest banks, was yesterday driven to the brink of nationalisation amid fears that the Government's latest bailout package would fail to alleviate the credit crisis.

The share price of RBS, which owns NatWest, fell by more than 65 per cent to just 11.6p after the bank prepared to unveil the worst losses in British corporate history. Lloyds Banking Group, the country's biggest bank, lost a third of its value.

Banking experts said that there was now only a "vague chance" that RBS will not be nationalised - possibly within days. The bank has already received £20 billion in taxpayers' money but is only worth less than £5 billion.

Customers were advised that money held with RBS - which has more than 12m customers and almost 2,500 branches across the country - was entirely safe and not jeopardised by the fall in RBS's share price.

The bank share prices collapsed within hours of Gordon Brown and Alistair Darling, the Chancellor, unveiling a new emergency rescue package for banks which could make taxpayers liable for up to an extra £350 billion.

The centrepiece of the new package was a scheme for the Government to insure banks against losses on bad or "toxic" debts, estimated at £200 billion. The Government may take further shares in banks in return for the insurance being offered.

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