First up, naked capitalism, January 16:
Of course, it takes one to know one. The no-doubt accurate call on the health of British banks comes from one of their own, Royal Bank of Scotland. Funny how no US bank is willing to make the same call.
From the Independent:Britains biggest banks are "technically insolvent", Royal Bank of Scotland said yesterday...
Analysts working for RBS, one of several British banks to have received emergency funding from the UK Government last year, told the City that "the domestic UK banks are technically insolvent on a fully marked-to-market basis".
The warning does not mean British banks are about to go bust, because the assessment is purely theoretical, and RBS said the position was "not unusual at this stage in the economic cycle"....MORE
From Calculated Risk, January 17:
UK: New £200bn "Bad Bank" Bailout Plan
It is time to put these pigs in prison à la our earlier post:
From the Telegraph: £200bn to save banks from bad debtIn an attempt to restore confidence within the financial sector, the Treasury will tell the banks of its plan on Saturday. It aims to announce details of the rescue package publicly early next week.That is equivalent to a total U.S. bailout of almost $10 trillion (about 2/3 of GDP).
The bad bank plan has climbed the political agenda in the past couple of weeks as the Government has become aware of the extent of the lenders' bad debts.
Sources said that a bad bank would have to take on about £200 billion of toxic assets. That would take the Government's total commitment to solving the banking crisis to almost £1 trillion in taxpayers' money that has either been spent or pledged.
That equates to about £33,000 per taxpayer. The total sum is equivalent to more than two-thirds of Britain's annual GDP of £1.4 trillion.
On Lying Bank Presidents c. 1909