True extent of bank bailout is revealed
The true extent of the UK bank bailout has been revealed by the Bank of England with confirmation that HBOS and Royal Bank of Scotland between them received loans totalling £61.6 billion when the financial crisis reached breaking point in October and November last year. The funds were provided as part of the emergency liquidity assistance program although the true extent of the loans in question will surprise and shock many people.
Even though the two banks in question put up around £100 billion in collateral between them it would appear that the UK banking system was literally on the verge of collapse. Perhaps now we can fully appreciate the difficulties experienced by Gordon Brown, the Bank of England and the various regulators in the UK not to mention the actual banks themselves. Once the recession is over and the UK banking sector is back on its feet we should be able to look back and learn lessons but at the moment there is still much fire-fighting to do with liquidity still relatively low. The likes of Lloyds bank and Royal Bank of Scotland are still dependent upon the assistance of the UK government.
If lessons are not learnt then we could at some stage return to this most difficult of economic environments!
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