BRITAIN has unveiled a second bank rescue package worth tens of billions of pounds aimed at kick-starting lending to homeowners and businesses.
Prime Minister Gordon Brown said plan, including an insurance scheme to protect banks from so-called toxic assets, were crucial to free up credit to get the economy moving again.
"Good businesses must have access to credit, jobs should not be lost needlessly,'' he said, presenting the package to reporters along with Chancellor of the Exchequer Alistair Darling.
Mr Brown urged other countries to take similar steps, warning that the world risked tumbling into a "damaging spiral'' of de-globalisation if they did not co-ordinate their responses to the economic downturn.
The British leader did not put a total price tag on the new measures, but press reports put the cost at £200 billion overall.
The announcement came as Royal Bank of Scotland (RBS), majority-owned by the taxpayer since the credit crisis, said it expected to suffer an annual loss of up to £28 billion ($60 billion), including losses linked to its part takeover of Dutch lender ABN Amro in 2007.
The government's new Asset Protection Scheme was "designed to protect financial institutions against exposure to exceptional future credit losses on certain portfolios of assets,'' it said.
Mr Brown said the package is not intended to help banks that had got themselves into trouble, but were instead targeting homeowners and small businesses, the "backbone of our country'', struggling to get finance.
As part of the plans, the Bank of England will use Treasury bills to purchase bank-owned assets worth up to £50 billion.
October's £37 billion recapitalisation scheme failed to increase lending by banks suffering from the global credit crunch.
Data this week is tipped to show the British economy is officially in recession, after the economy shrank for the second quarter in late 2008.
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