Treasury forecasts £77bn loan losses for Lloyds and RBS

Well well well, Another banking story!!!

Very very interesting, but what about the value of 'our' shareholdings? Are these included in your break-even analysis or is this merely based on the insurance against losses scheme?

I'll be very surprised if the premiums were set at a realistic level as you impliedly suggest- particularly given how quickly the deal was done...but hang on- what if this is a double dip we're heading for and the losses are only just starting to accrue?

As an aside- why on earth are the BCC coming out quite so strongly in criticising the BoE for not extending QE. Would that not be an unnecessary risk similar to extending the limit on the card?

yet more proof that Lloyds was sold a pup..... the directors should be in court for failing in their fiduciary duty by caving in to save GB's skin...

if lending decisions have been this poor how is it that a) the banks are not nationaised entirely or b) the entire management sacked? If any other business that would have been the case, yet these guys are not only still drawing a significant wage but also some bonuses!

The day Parliament breaks up would seem to be a good day to bury this piece of bad news.

Much like the treasury accounts being qualified and the other government accounts not adding up earlier this week.

There seems a huge amount of bad news coming out this week when our elected representatives cannot take the government to task over them.

How convenient!

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Robert - you must make "eye-watering losses" your catchphrase as you use it so often.

I know it's hard to describe 42.2 Billion as anything else - but you could try..
Earth shattering losses
Ground breaking losses
Ball shattering losses
Head frying losses
Teeth grinding losses
Head banging losses
Hand clapping losses
Spine shivering losses
Nail biting losses
Bum squeaking losses
Hair loosing losses

...they should keep you going for a while why I think of some more....

Just keeping it interesting Bob.

P.s.

Wasn't someone talking recently how the British Public would be 'doing quite well' out of this Lloyds deal when the turnaround comes and we sell back our shares?

....or was it all a dream....

The asset protection scheme is not insurance it is a subsidy for banks. Imagine you phoned up a car insurance company after you crashed your car - would they give you coverage for an event that had already happened even thougth you did not know how much it would cost to repair the car.

Whatever the premium on asset protection scheme it should be doubled. The present charge is to cover losses on the crash that has already happened. As soon as the banks have asset protection insurance and they are paying a premium for it naturally they are going to make sure their losses exceed the premium. They will be looking for schemes and deals that crystalise losses on old protected loans while creating new 'profitable' business.

Since government have decided that people who lend money to banks should be protected from loss all the banks should also be paying compulsory insurance against costs to the state if they crash again. What is the market rate for insurance against an event that has happened regularly throughout history and which cost more than £100Bn the last time it happened?

If they were paying for the true costs of their business banks would not be nearly as profitable. They might start looking at getting their costs into line by cutti8ng pay.

This effectively gives the lie to Brown's assertion last week in front of the select committee chairmen that if Lloyds hadn't stepped in to buy HBoS, then HBoS would have gone bust. Clearly, the government would have nationalised the bank, just like Northern Rock, and Lloyds would not now be staring at several years flirtation with insolvency.

The proof is that any way you cut this, the taxpayer foots the bill, so whether we simply nationalised HBoS in October last year and took the consequences then, or stretched out the pain over several years, fundamentally makes no difference. We, the taxpayer, is still the insurer of last resort, and we, the taxpayer, will never see any return for our largesse, magnanimously offered on our behalf by HMG.

Meanwhile, it's business as usual for the City. More Dom Perignon, anyone?

Are you suggesting RBS and Lloyds are paying £25b in fees and loss of claimed tax? Seems steep. Did some one give you these figures or have you calculated them yourself like a good journalist?

Wait for the next leg down. You can only hide rubbish for so long before it needs to be addressed. Anyone know the true extent of toxic debt in the banking industry. 2 years after it started and the banks still won't tell us. Are the governments powerless? Shouldn't this figure be the first thing to find out before we gave any taxpayers money to them?

Have these figures kindly provided to you by the Treasury been subject to an external audit process?

Thought not...

can someone please explain how the boards of these what now should be termed terrorist organisations are still in place ???

These organisations and there co conspirators alone have done more damage to our country than terrorism ever will.yet we still see the same people in the main at the top while the people who were just foot soldiers get sacked.

We are now the share holders and we are now responsible so lets get the lot of them sacked for gross mismanagement and replace them with some graduates they really cant do any worse than what is in place.

How are we expected to have any confidence in any decisions they make until that happens.

So RBS, which is basically owned by the Government (83%), has insured itself against losses with that same Government. Is anyone really claiming there is any sanity in this arrangement? Basically whatever happens the whopping losses made by this wretched bank are going to fall on the Government one way or another. Not sure why we've come up with a system that partially cushions the blow against the remaining 17% of shareholders though. Same situation with LLoyds of course. What about other banks? Are we expecting any non-nationalised banks to claim on the Asset Protection Scheme as well?

And if we think RBS has a loss of £40+ billion in the pipeline, where does that leave their Capital Ratios? Are we going to have to recapitalise them again (ie pump in yet more Government money?)

Robert,

I came across this query written in another blog:

"is anyone else aware of current Lloyds TSB policy a bank owned 43 percent by us to close accounts without notice and without discourse if they do not meet its criteria for acceptable levels of profitability?"

------

Is this true? It seems like a return the bad old days. The government has always encouraged those on benefits say, to be paid through bank accounts as it is more cost effective than cashing giros etc. Do these banks not realise that they have responsibilities to society?

#6

Is it just me that sees a certain predictability in the fact that a business based on buying and selling gold concludes its apocalyptic forecast of the future of the financial markets with the assertion that the ONLY safe investment is, you've guessed it, gold?

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Robert
What exactly are the "unpoisened parts of the two banks". Is it not so that the cancer has spread, metastasis, if not yet then soon everywhere?
On a global scale innovative accounting rules have helped the banks the last two quarters, but where will any income come from the next quarters? Certainly not from the left overs of a ruined economy. I suggest to rename the file "bank" and create a new one: soon!
C

Still skirting around the exchequer's funding shortfall by falling revenues Robert?

Anyone would think you were avoiding the issue

In this article you don't mention how having these potential catastrophic losses on your books is actually changing the behaviour of the banks. Where are they squeezing this profit from?

If every tax payer who currently banks with RBS, Lloyds and all their subsidiaries left, what would the loss to the tax payer be then? Can we in effect push them into administration and liquidation without incurring any further loss?

While these huge losses were being racked up, the banks were happily dishing out massive bonuses and pension benefits to staff. In fact, even now the losses are known they are still paying out bonuses.

This money should be recouped. Just charge those responsible with corporate fraud and levy a fine equal to the bonuses paid out. I see no reason at all why the alternative, that the ordinary tax-payer picks up the bill, should be deemed any more acceptable.

The banks have ruined the country, yet we seem happy to award them bonuses for doing so. Not only that, but we seem to be happy to let them go ahead and do it again as soon as they have the chance. This is complete madness, and I cannot for the life of me understand why Robert Peston does not seem to see this.

So the sorry saga continues. Our public wealth stolen to prop up privately owned Banks, whose rapacity has
wrecked our economy, in order that the Directors and Senior executives of these Robber Barons of the 21st century can continue to receive enormous salaries and huge bonuses for their continued infamous activity while Unemployed on Job seekers allowance and OAPs on basic National Pension struggle to survive below the poverty line.

Picture in today`s Telegraph showing Fred and Joyce Goodwin jetting off from Heathrow.

Happy to report he still has the shirt on his back, unlike some of us.

My hero, unrepentant to the last.

RP says: 'That's the kind of financial calamity that makes me feel slightly dizzy.'
The Labour party now knows that GB was a wizard as Chancellor of the Exchequer and now Prime Minister at 'nodding intelligently' about the strength of the nations finances, at the same time as being far out of his financial depth.
One has to fear the multiple risks of leaving him in post, not least to himself.

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This comment was removed because the moderators found it broke the house rules. Explain.

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Are you sitting comfortably? Then I'll begin....

...so if we reinflate the credit bubble then those assets will recover in price and there will be no loss at all to anyone...

...so it was time for Daddy Bear to go bye-byes....

...and they all lived happily ever after.

Any more stories for the kiddies; eh?

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Could the Mods please explain why lm_f_ao ie Laughing My Freaking Ass Off is rejected as profanity?

(Suitable Twitter hashtag: BBCFAIL)

Here's profanity: dozens of UK troops killed needlessly in Afghanistan for lack of helicopters.

"Forget the helicopters, shall we fund another Quango, PM?"

Robert,
How much have we lost with Northern Wreck? We were supposed to get out of it with a profit for the taxpayer but Darling made that stupid promise before they had done due diligence.

If any of these predictions are based on government figures, you can bet your bottom dollar (if you still have one) that they are dreamt up by the over-optimistic boffins in the treasury who are spinning wildly around in clouds of smoke trying to dream up new ways of having to avoid admitting that things aren't quite as they seem.

'Worse than expected' - a three word summary of Gordon Brown's political career....

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d) Is RBS misusing the tax payers' monies

"But to call these losses the toxic fruit of reckless lending doesn't quite capture the magnitude of these banks' departure from sensible prudential standards."

Wasn't part of the deal that these guys resume lending to 2007 levels? Where are the sensible and prudential standards in that!?

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This comment was removed because the moderators found it broke the house rules. Explain.

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12:51 and all my comments have been referred to the Mods?

Amazing.

#39 plb_plb
The big banks have been ordered to lend more (as well as fulfilling the FSAs capital adequacy requirements), in order to shore up the housing market, to prevent a collapse. I went into Lloyds TSB recently in order to pay a cheque into my wife's account and was accosted by one of their managers who attempted to sell me one of their loans, harping on about how they are still able to lend even in the current climate. Wasn't interested obviously!

Surely more evidence for a civil action on behalf of shareholders against the Directors of both those banks......Talk about breach of fiduciary duty........!!
I don't happen to have been a shareholder - simply a customer of HBOS - so I cannot take any action.
Have RBS and HBOS shareholders given up all hope, or is a group of them investigating the matter?

But regarding the government's treatment now of the banks - it is in a rather tricky position.

In the short term it simply has to go along with them making huge spreads (with Libor at less than 1%), given they all need to be dug out of a big hole.

But at some stage it needs to introduce a large dose of competition and force them to stop ripping off their customers.

Just two things need to be done:
- legislate for all banks to open their books/disclose their management accounts....... what harm would that do?....... and now crikey that would lead to a bit of competition!
- break them up, limit their size and split off the deposit taking parts from the casino parts. Then sell off the casino parts under the new laws of disclosure. Then mutualise the deposit taking parts (i.e. effectively hand these bits to the depositors).

For the benefit of every single citizen of the UK we must change our monetary/banking system from the 'black box' model where we leave it to so-called experts (FSA/regulators/rating agencies etc/Basle 1, 2, 3 and half etc) to look inside the black box and then tell us...... "don't worry your pretty little heads, people, we've had a look, we're very expert at this, and this bank is jolly safe!".....

....to an 'open book' model, where all is on public display (save actual individual names of people/businesses etc of course) and we can see for ourselves what they are up to.

What do we have to fear from forcing banks to disclose huge amounts more information?

A fairer bargain between the 'people' and the 'money lenders'?

Peston,

If I wrote to my MP to complain about the censorship on this blog, a publicly funded blog on Business, through which I have attempted to raise legitimate concerns, e.g. the betrayal of the obligation on the Fourth Estate to serve the public, would you (or the Mods) object to this?

No 20. Well said Wykhamist. But who would be able to bring such a charge. Could it be possible?
Anyonewho believes in fairies clap hands now.

FTSE_muppet

Would love to know what you're saying that is so controversial!!

Can Robert explain what happened to Basle i and ii accords which were meant to govern financial risks within banks. Did anyone adhere to them?

#6, do you hold shares in razor blade companies by any chance, I think I should slit my wrists now! (gold ones of course).

#1 windchrisleeds - Banks are businesses! They are at the heart of our current problems and probably our future ones..... buck up!

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"33. skynine wrote:
Robert,
How much have we lost with Northern Wreck? We were supposed to get out of it with a profit for the taxpayer but Darling made that stupid promise before they had done due diligence."

The last i had heard was that £18bn of the 27bn loan has already been repaid and so it is ahead of schedule. However they are also being allowed to lend again which it is hoped will speed up the recoveryt of NR and the return to private sector ownership. whether that will work remains to be seen but it looks like the monies will be recouped at least.

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9. tom_edinburgh

Good stuff, I would also like to add that part of the reason the world has got (or rather will get) into trouble is when banks started selling insurance (CDS's and PPI). On both counts one is where they simply don't understand the risks and the other where they do not ensure the insurance is right for the customer.

....and now the Government is selling (or giving away) insurance.

Isn't this just a little bit worrying? - who is insuring the Government?

so the banks lost more money and in reality its taxpayer money going down the drain.
sadly untill those responsable are able to be brought to book then confidence in banks and governmental handling of the problem will not return in near future.

16. obangobang

....of course it's predictable - but then are you disputing any of the facts?

20. At 11:47am on 22 Jul 2009, wykhamist wrote:

"While these huge losses were being racked up, the banks were happily dishing out massive bonuses and pension benefits to staff. In fact, even now the losses are known they are still paying out bonuses."

wykhamist - rest assured these actions are simply accelerating their own downfall.

The tax payer should not be insuring the gambling debts of the banks, only the depositors money should have been protected. The banks are like a bent bookie and some politicians are like a bent jockey so the ordinary punter(us) gets scammed.

ftse_muppet

What are you trying to say? It must be good I've never seen so many breaches of the house rules.

Maybe it's a secret the BBC don't want to let out.

The name of the game is to make money money by hook or crook.
In fact I was a couple of billion short myself and needed a top-up fundage to invest in the markets. But I blew it I should have asked for 100 billion to do some of that old dodgy double entry book keeping accounting stuff we did last christmas. i.e 50 % legal + 50% dodgy toxic on the sly

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#53. ftse_muppet wrote:

"I made a statement in an earlier post that said RBS were misusing tax payers' monies. What legitimate reason can be given for censoring this claim?"

I think you'll find that the statement to which you refer is still visible on this blog (#38). It is your other childish, off-topic posts that have been removed (or, as you would have it, "censored").

The fact that the BBC is a publicly-funded organisation does not give you the right to use its public forums to post your opinions, just as you would not be permitted to spray them on the walls of an NHS hospital. This blog, like all others on this site, has a clearly-defined topic and it is my experience that all posts that add to the discussion are permitted, whether or not they follow what you might perceive to be a BBC "party line".

Now, back on topic...

Even I, as someone who has worked in finance for 10 years, in commercial banks, investment banks and even a central bank, am completely at a loss when I attempt to work out just how much exposure we - the taxpayers - have to the banks' losses. Robert Peston's analysis above does nothing to clarify (not his fault - I simply think that it's unfathomable). I don't think any of us will know for five years or more what this whole debacle has cost the country.

FREE THE FTSE_MUPPET NOW - ALLOW HIM TO SPEAK.

WE ARE ALL ADULTS AND CAN MAKE OUR OWN DECISIONS ABOUT THE CONTENT - IT SEEMS THAT IT'S OK FOR THE BEEB TO PROMOTE FACTLESS STORIES ON THE TV SO WHY ARE YOU PICKING ON FTSE_MUPPET?

I'm sure whatever has been said is no worse than what we're all thinking was said (what I am thinking is completely unprintable)

The stench of corruption has reached the BBC - what next - lies about swine flu deaths - or is that happening already?

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RE MODERATION OF FTSE Muppet

IS WHAT HE/SHE SAYS REALLY SO BAD??

IT CANT BE AS BAD AS THE ABUSE OF THE PUBLICS MONEY BY nulabour/GORDY?

FTSE-Muppet:

The message board house rules are with little consistency enforced for the commentators, but the moderators don't follow their own house rules. If some moderator (I am not sure who the Big Brothers are?) finds not enough substance to remove a comment, then the comment is simply put into the 'referred to the moderators' category, thereby made invisible to the other readers and then left there for a few days. This is effective censorship, no prove of anything needed.
The message board house rules state:

"One of your messages has disappeared or been removed from the board
Please be patient - your message is being checked by one of our moderators.
If there is no problem with your message it will reappear shortly.
If your message breaks our House Rules it will be removed permanently and you will be sent an email explaining why. Please reply to this email if you would like to query or comment on the decision."

Some of my previous comments have been, for no good reason, 'referred to the moderators' in Robert Pestons Blog 'Tory plan to sanitise banks'.
They have been left unmoderated now for over two days
without any follow-up.
Moderators, could you please let them reappear shortly?

#64 rbs_temp

Actually, post #38 about RBS misusing tax payers' money is not one of the censored comments I was referring to. My original comment, that was, made several claims so I resubmitted each claim one-by-one. All (except d) have since been buried.

Your comparison with spray-painting an NHS wall is idiotic. You are a New Labour drone in denial. Simples.

So, what else did I claim? I'm sure you can look it up in your database. All those donations to the Labour Party didn't go to waste, surely? You must have spent some of those millions on CRM software, lol!

#64 rbs_temp

"Even I, as someone who has worked in finance for 10 years, in commercial banks, investment banks and even a central bank"

Well, if you haven't figure it out by now... lol.

You are part of the problem.

Robert

I thought that UKFI was created to represent the taxpayers interests regarding RBS and Lloyds BG, so the source of your article should have been them and not the Treasury. In terms of regulation is it not now the case that the TRI partite system has now been replaced by the QUATRO partite system?

Nothing like keeping it simple!

#64 rbs_temp

"It is your other childish, off-topic posts that have been removed"


So who is deciding what is off-topic? - you, or a faceless moderator at the BBC?
If the comment involves RBS then it is very much on topic. If it's so badly off topic (like about the weather) then it will not receive a response from other bloggers.

Unless I'm mistaken this blog is started by the 'business editor' - that's you Robert - and RBS is still a business (well at least the last time I looked over the road!)

I'm also confused by this statement
"The fact that the BBC is a publicly-funded organisation does not give you the right to use its public forums to post your opinions"

...I thought a blog is exactly for posting your opinions - or are we all journalists here bound by the rules of journalism?

....and that's my opinion - anyone care to join?

#67 - Curzon
"IT CANT BE AS BAD AS THE ABUSE OF THE PUBLICS MONEY BY nulabour/GORDY"

You have slipped into lower case - are the wheels coming off? I'm worried the pressures of recession are taking their toll - can I help?
(unfortunately I don't have 1.1 trillion to plug the whole, but i can lend a sympathetic ear)

From what I have seen, ftse_muppet is not posting anything controversial or which might cause embarrassment to anyone in or out of government. They are merely off-topic ramblings from someone who wishes his opinions to be heard.

Unfortunately, I think we can probably expect a lot more of this nonsense now that the schools are closed for the long summer holiday. Roll on September.

Peston,

If I wrote to my MP to ask that the decisions behind burying my comments were released under FOIA, would you (or the Mods) object?

You really are in danger of _becoming_ the story, doncha think?

#69. ftse_muppet wrote:

"Your comparison with spray-painting an NHS wall is idiotic. You are a New Labour drone in denial. Simples."

Just because I disagree with you does not make me a "new labour drone", as you put it. I do not vote Labour.

70. ftse_muppet

".....and even a central bank"

notice rbs_temp has not specified which one - I'm presuming it's the old lady - surely it couldn't be the fed - or maybe it's the central bank of Kazaghastan.

It's good to know that the old boy network still operates fully - a tour of the banks and still hasn't worked out why the brown stuff is all up the wall....

71. At 2:24pm on 22 Jul 2009, excellentcatblogger wrote:

"In terms of regulation is it not now the case that the TRI partite system has now been replaced by the QUATRO partite system?"

Now that's funny - shame it's wasted on this blog.

Maybe we should go for the 'CENT-Pertite system' - 100 regulators arguing about 'what is to be done' and still achieving nothing.

"But to call these losses the toxic fruit of reckless lending doesn't quite capture the magnitude of these banks' departure from sensible prudential standards."

Bingo!

74. At 2:33pm on 22 Jul 2009, rbs_temp wrote:

"From what I have seen, ftse_muppet is not posting anything controversial or which might cause embarrassment to anyone in or out of government. They are merely off-topic ramblings from someone who wishes his opinions to be heard.

Unfortunately, I think we can probably expect a lot more of this nonsense now that the schools are closed for the long summer holiday. Roll on September."

....wait a minute.....isn't all that off topic too? What has school holidays and FTSE_muppets behaviour got to do with Business?

Here's something on topic:

"Gordon Brown says it has been a "difficult year" but insists he has not shirked "tough decisions" as he begins his summer break."

....like whether to order a flake with his ice cream or simply cover it in strawberry sauce whilst he sits on he edge of Lake Windemere....

#74 rbs_temp

"From what I have seen"

Well, you are disingenuous or you are making it up. Just about everything I posted early on is _very_ on topic, and subsequently, if it deals with censorship, events make it on-topic too.

And I call _myself_ a muppet!

"Treasury forecasts £77bn loan losses for Lloyds and
RBS"
+
Rob
Yes, the old jokes are the best
but, we heard that one already
are you having a bad inspiration day today?

Apparently our big banks' recklessness in the boom years has not meant we have run out of cash - money is not, or never has been, an issue.

"UK has enough helicopters" - Brown

The Treasury says it expects the public purse to incur a loss of £25bn in respect of the Asset Protection Scheme, so no fear of our Taxes going up yet again!

#76 rbs_temp

'Just because I disagree with you does not make me a "new labour drone", as you put it. I do not vote Labour.'

What do you disagree with? Let everyone in on it, 'cos ya know, just about _all_ of my comments are censored, so not visible to the rest of us plebs without access to Labour CRM, lol!

Forgive me for calling you a New Labour drone. Perhaps you are one of the Special Brew-swigging lot who abandoned Labour for the BNP. Say it ain't so banker-man!!

writingsonthewall - thank you very much for the link in support of fiscal and monetary conservatism.

I knew that you would come round.

The entire process was an act of irresponsibility on the part of banking institutions and governments. These two are joined at the hip and there is and was no separation in this process. The banks gave the bad loans, that they made a substantial amounts of money processing, to willing governments. The banks wanted to maintain profit margins without all that risk that they had developed with their unsecured loan scheme. The banks should be forwarding processing fees to the government attached to the bad loans and at least reduce the vunerability of the taxpayer for these costs. Under any other circumstances this would have been designated a criminal organization and if investigated that may be proven to be true as it apprears the majority of the financial services industy was in on the scam. A large number of people received letters saying: oh, by the way, your retirement/investment account has just been diminished by 30%, no hard feeling we hope. The government will tax you to cover our losses, but nothing seems to be in it for you. Good luck and we hope you will remain our loyal customer.

There ya go! #84 and #85 got through! Quote Peston and you're good to go. Forget about contributing your opinion, analysis or insider info!

Oi, Pesto! Will Mandy have the time to keep up all those committees - like the banking one - when he becomes PM?

87. At 3:17pm on 22 Jul 2009, truths33k3r wrote:

"writingsonthewall - thank you very much for the link in support of fiscal and monetary conservatism."

.....and how is that going to be achieved under the present system? Surely if everyone and everything is in competition with each other then this becomes impossible.
I'm sure if you asked Yussain Bolt to conserve his energy expenditure in the next 100m he runs he will be only too happy to tell you where to get off as his primary goal is to win - and not conserve energy.

It sounds like what you need is "From each according to his ability, to each according to his need" - which would promote the conservatism you desire....

88. ghostofsichuan


....yes, but give them credit for consistency.

The people ran up bad debts which they couldn't pay back and risked default

The banks ran up bad debts they couldn't pay back and risked default

The Government ran up.....well you know the rest.

So the Treasury are still frantically trying to make some sort of forecast.

If it's like their other forecasts you may as well think of a figure, any figure will do and double it.

Like other posters on here I tried to read through it and make some sense out of it.

We should know better for the Treasury under Brown {still is} never produces anything that is remotely understandable.

Read between the lines and what we get is a never ending series of losses of such magnitude it doesn't bear thinking about. All discovered of course when Brown is long gone.

I'm a a bit of a thicko when it comes to all this banking bail out mullarkey etc etc.
What if the government invested as much money in revitalising UK manufacturing industries. Would this help in any way shape or form?
Someone please explain.

93. At 4:31pm on 22 Jul 2009, CRANBROOKKID

What about instead of enslaving future generations in debt and robbing savers and pensioners through inflation, the government got out of the way and let the market function?

Yes Lloyds was sold a pup and RBS blew it through the ego of its CEO but are you telling us they are the only ones with toxic garbage on their books. Are we saying the soon to be broken up FSA's recent stress testing was good enough given we have no information on the question set, and no doubt the Freedom of Information act excludes us finding this out.

No underlying attitudes have changed when it comes to stock market investment and the public is still abused daily through misinformation and the endless greed factor that still reigns supreme.

What we need to know is how much bad debt are the banks openly carrying as well as the Insurance companies and pension funds.

And lets not forget the Americans have not even started on their legal fights f who know what and when and the wonderful compensation packages they will be claiming for.

I'm sorry Robert but your going over he same thing is geting tiring and you need to focus on the bigger picture, like supplying answers to the above.

That way we can all make informed decisions and not be reliant of scare and rumour mongering because we don't know.

Certainly the B of E and the U S Treasury have taken on board wadges of rubbish in the name of the taxpayer but why should we assume hey will net out for nothing

If they changed the rules so that it is harder to foreclose on bad loans, then slowly bring the rules back to normal. The banks will only be able to put a small number of properties on the market, propping up the market, keeping people housed and taxpayers from the wolf. After all the Gov gave its blessing to lend to the sub prime market, it should afford some protection to the people lent to.
This would have in turn left there accounting percentages intact and they could have traded their way out of it. Least we forget all this is on paper and we are in so much trouble because of a line drawn on a percentage chart, allowed by the Gov and worked to by the banks.

We shouldn't be surprised at these bad numbers.
In fact, almost all of the RBS and Lloyds "insured assets" may have to be written off in the end.
I suspect that RBS and Lloyds and the Treasury know that these losses are mostly non-recoverable, but are breaking it to the public gently.
The entire 580 billion may be worthless.
Much of it is sub-prime.
Sub-prime losses are hopeless, unlike UK reposession losses.
A reposession in the UK may realise 50% to 80% of the loan value as recoverable.
But in the USA sub-prime foreclosures are resulting in almost total losses, with entire suburbs abandoned.
Boarded-up cities.
It may not even be possible to realise the land-value, due to re-development costs.
Why would banks put any healthy loans in the insurance scheme?
We should be prepared for the worst.

Robert, your comment is fatuos because liabilities need to be declared however unlikely they may be called on, that is why they are there!!
The way your talking the government has used up billions of taxpayers money and is on no risk when we know that is not the case.
Why buy the garbge of debt due if it was risk free, and what are they still holding back on in teh hope the obscene margins they are now working on will act as a cushion against further write downs.
It all sounds like an anticompetitive state of overt collusion between the banks and this lame duck government.
if there are green shoots out there it is the lilly livered blood of this lame duck government being shot to pieces by the banks strewn across the whole country!

More alarmist nonsense from Pesto. As an accountant I know that the government support for banks hasn't cost them a penny and they will most definitely make a profit on these deals unless taken to court.

Unfortunately this profit they will make will be at the expenses of ordinary shareholders and pensioners.

Hope you are proud of yourself Pesto.

Rearrange this: barrel, got, you, me, a, over