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UK taxpayers shoulder £26 billion loss on banking share stakes

As we enter 2010 UK taxpayers will be shouldering the burden of a £26 billion loss on share stakes in Royal Bank of Scotland and Lloyds bank. These are two of the U.K.'s more prominent banks which were bailed out by the UK government at the height of the UK banking crisis. Without this financial assistance, funded by UK taxpayers, it is highly likely that one or both of these banks would have under causing a catastrophic domino effect across not only the UK banking sector but the worldwide banking sector.

While taxpayers are currently shouldering a £26 billion loss there is no doubt that if any one of these companies had collapsed the loss to the UK economy, the worldwide economy and UK taxpayers would have been significantly more. The £26 billion loss currently "on the books" would have faded into insignificance against the catastrophic impact a failed UK bank would have had on the overall system. So while the UK government is still receiving significant criticism from various parties, in reality the authorities had no choice but to bail out the banks with the alternatives not even worth contemplating!

Whether or not UK taxpayers will eventually record a gain from these banking investments remains to be seen.

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