UK banks hold £95bn of sour assets that could qualify for US bailout plan
Britain’s five leading high street banks have as much as £95.3 billion ($175 billion) of distressed assets on their books that may qualify for the American bailout scheme.
If the British banks tap the rescue fund being set up by the US Treasury and the Federal Reserve to the maximum, they could secure one quarter of the $700 billion being made available. Under the terms of an outline agreement that appeared to have been reached by US policymakers last night, Britain’s lenders will be able to use the facility.
However, the prospect that the US Treasury could pay for UK banks’ bad assets is likely to infuriate some American politicians and taxpayers, who would foot the bill. As Congress edged closer to agreeing a plan for the central bank to take on lenders’ toxic assets, HSBC appeared to be the UK-based bank best placed to benefit.
Combined, the five British lenders hold securities worth $175 billion, which they could transfer to a federally backed Treasury fund. Under the proposed terms of the rescue package, non-US financial institutions must have significant operations in America to qualify.
...
Alex Potter, a Collins Stewart banks analyst, said: “HSBC, RBS and Barclays would be the clear main beneficiaries if the facility is approved, they are allowed access to it and if they chose to place some of their securities there. If they have a substantial enough presence in the US — HBOS has a limited treasury function, for example — they should be eligible. The question then will be: ‘What are the qualifying instruments?’.”
link
That is really very grand!, like, outstanding example of American generosity
