UK unveils second bank rescue, warns of economic collapse
British government has brought out a second banking stimulus package today amidst the news that Royal Bank of Scotland has made a loss upto £28bn for 2008.
Under the new plans, the government will insure bank loans for corporate and consumer debt. By offering to cap potential losses, the government hopes to encourage banks to lend again. Economists said the Asset Protection Scheme looks like a form of quantitative easing - effectively pumping more money into the economy.
The UK government on Monday announced a raft of measures in an effort to promote bank lending and rescue the economy.
The package, which was thrashed out over the weekend between ministers, bank executives, treasury officials and involved Gordon Brown, the prime minister, is a second attempt in three months to restore confidence in the banking system.