Brown's bank bailout, v2.0

Gordon Brown’s calendar and sense of self must be out of whack. His latest
bank bailout, a scheme announced on 19 January to insure UK banks against the
risk of “exceptional future credit losses on certain portfolios of assets” ­
intended to get them lending again, ­ looks rather like the prime minister
thinks he is Santa Claus and that it is still Christmas.

It seems he has mistaken taxpayer’s money for chocolate coins and taken it
upon himself to nourish the banks with everyone else’s Yuletide treats. The
Treasury announced on the same day that it would convert its preference shares
in RBS to ordinary shares, sparking fears that full nationalisation is now
inevitable, and a brief spell for RBS shares in penny-share territory, The
Times reports.

Our website has just launched a new opinion poll, The FD Question; tell us if
you think this second bailout will succeed in forcing banks to start lending
again at
www.financialdirector.co.uk/2234258.