January 30, 2009

As Royal Bank of Scotland piles up colossal losses, Gordon Brown ushers in a new bailout to stave off nationalization January was a wild month for the British banking sector. On Jan. 19, Prime Minister Gordon Brown announced a second bailout for the banks that would cost some $280 billion.

That same day the government said it will up its stake in Royal Bank of Scotland Group, (RBS) from 58% to 70%, just when RBS announced the biggest loss in British history. Investors concluded that wholesale nationalization of the top banks was at hand and pummeled shares in Barclays (BCS), RBS, and Lloyds Banking Group (LYG).