Without a thorough review of all the assets that are being underwritten, the latest government bank bail-out means ministers are effectively writing a blank cheque to the banks that have arguably been largely responsible for the financial crisis.
The Government is now proposing to underwrite billions of pounds worth of debt which could leave taxpayers open to vast losses.
Ministers are offering hardly any details about the terms of this underwriting. Taxpayers are being signed up to yet another bank bailout, when it is clear the Government hasn't done its homework. The £100bn insurance of bad debts owned by the banks could result in enormous losses for taxpayers, since these assets are being insured in a falling market and there are still further big losses to come in the property market.
The Prime Minister says he is putting in place proper controls to monitor the use of taxpayers' money. They should already be there! Why weren't the banks required to make a full declaration of their bad loans when the £37bn was invested?
With RBS now 70% publicly owned, there can be no more excuses for it not to start lending at reasonable levels to viable businesses and individuals.
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