Barclays and Royal Bank of Scotland (RBS) suffer set-back

Royal Bank of Scotland (RBS) and Barclays have suffered major set-backs after Henry Paulson US Treasury Secretary indicated that what’s left of the $700 billion bailout fund will not be used to create a dumping ground for bad US mortgage assets but will be used on a broader scale to bailout the financial industry, from insurers to credit card lenders.

Both RBS and Barclays expected to pass on billions of pounds of toxic assets onto the US Treasury. This change from the US government will force both UK banks to hold onto their bad debt, this is likely to cause a huge sell at a loss or billions more in writedowns.

Barclays (LON:BARC) shares dropped 10.8p to 168.2p and Royal Bank of Scotland (RBS) dropped 11.2p to 56p on the news.

Source: DailyMail The Duchess film