Taxpayer loses £12 billion as RBS faces nationalisation

Taxpayer loses £12 billion as RBS faces nationalisation




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There was only so long that the Royal Bank of Scotland could sweep its bad debts under the rug. Yesterday the bank announced that it could have lost as much as £28 billion last year in what is being called the most disastrous annual loss in British commercial history. 

Shares in RBS yesterday plummeted 67% to a mere 11.6p. Reacting quickly, the Government agreed to spend an additional £5 billion to increase its share of the institution from 58% to 70% to prevent it from collapsing.

 

Late last year, in the first banking bailout, the Government bought 22.8 billion shares at 65.5p, meaning that in just two months, the taxpayer has made a loss of £12 billion.

 

Some MPs are now calling for the full nationalisation of RBS as Gordon Brown revealed he was “angry” with the irresponsible behaviour of former chief executive, Sir Fred Goodwin. Defending the additional bank bailout, Mr Brown said: “I will not sit idly by and let people go to the wall because of the irresponsible mistakes of a few bankers.”

 

City analysts have predicted that as many as 30,000 people could be made redundant at both RBS and Lloyds Banking Group, formed from the merger of Lloyds TSB and HBOS.

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