Over the next few weeks a small army of bankers, accountants and lawyers is to start poring over questionable loans on the balance sheets of Britain’s banks in an effort to establish what level of losses the government might be willing to insure against. The big gamble is that they will do a better job of assessing those risks than the banks did when they agreed the loans in the first place.
As ministers sketched out the contours of the government’s proposed scheme to insure banks against unexpected large losses, bank executives were scrambling on Monday to understand how the scheme will work.
