UK too announces details of its bank rescue plan

The British Treasury announced the details of its Asset Protection Scheme, in which a bank's riskiest assets will be ring-fenced and under which the UK government will cover up to 90% of future losses. Dubbed as "Operation Broom" by the UK Treasury, the Asset Protection Scheme is an attempt to clean up bank balance sheets by identifying and insuring risky assets, thereby removing uncertainty about the value of past loans. Alistair Darling, the UK chancellor, believes the scheme will help restore confidence in the banking sector by putting a floor under future losses and provide a platform for banks to restructure and to increase lending to business and homeowners. Taxpayers may become liable for £500bn worth of bad loans and investments made by Royal Bank of Scotland (RBS) and Lloyds Banking Group, according to the BBC. It would be part of the government's Asset Protection Scheme, it added.