British aid for the rescue of struggling banks due to the global financial crisis has reached a total of £850 billion (€933 billion), the National Audit Office (NAO) announced on Friday.
The amount of the British government’s aid package, including stock purchases, guarantees, loans, and insurance schemes for financial institutions, has totaled £850 billion, according to the NAO report. The British government under Prime Minister Gordon Brown justifiably spent an “unprecedented” sum to rescue banks, which largely began to falter after the collapse of the American investment bank Lehman Brothers in 2007, concluded British auditors. “It is hard to imagine the scale of the consequences for the economy and society had significant banks been allowed to fail,” said NAO chief Amyas Morse.
“The Treasury is authorized to use taxpayers’ money to preserve savings deposits and stabilize and restore confidence in the financial system. A major question that arises is how much all of this will ultimately cost taxpayers, and it will take time to get an answer to that.” Britain, like other countries, has spent billions of pounds to rescue leading banks including the Royal Bank of Scotland (RBS) and Lloyds Banking Group (LBG) during the crisis. Northern Rock was immediately nationalized. LBG is 43% owned by taxpayers. In RBS, affected by the credit crisis and the acquisition of the Dutch giant ABN Amro, the British government most likely holds a total stake of 84% after the latest aid measure. (H)
