Govt takes on £167bn of RBS foreign bad debt
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The Government has taken on as much as £167bn of RBS’ foreign debt as part of its inclusion into the Asset Protection Scheme.
According to The Telegraph, only £114.5bn of the entire £281.9bn of debt entered into the scheme by the bank was originated in the UK.
The debts taken on by the Government include £75.4bn of EU debt, £43.6bn of US debt and £48.4bn of “other” foreign debt. This includes £2.9bn of Irish mortgages in negative equity, 70,000 UK mortgages with an average loan to value of 95 per cent and £3.1bn loans to hedge fund managers based in the Cayman Islands.
The newspaper says around a quarter of the entire burden the Government has taken on is a result of RBS’ acquisition of ABN Amro.
The formal announcement that RBS had entered the asset protection scheme yesterday revealed that the Government’s economic interest in RBS will rise to 84 per cent, though its shareholding will remain at 70 per cent.
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