U.K. banks get more government aid

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Bill Radke: Banks have been at the center of the financial storm. This morning, we learn the British government is — again — pumping tens of billion of dollars into two of the biggest banks in the U.K. Here’s Marketplace’s Stephen Beard in London.

Stephen Beard: In the first case, the Royal Bank of Scotland is getting another $41 billion of taxpayers’ cash — bringing the total to $75 billion, the biggest bank bailout anywhere in the world. At the same time Lloyds — another troubled lender — is also getting extra money.

Finance Minister Paul Myners says this will strengthen the banks’ capital and help them get back on their feet and eventually repay the cash. In return the banks will sell off some of their businesses.

PAUL MYNERS: What we’re getting is a stronger banking system, less risk for the taxpayer. But most importantly this is part of a step to bring increased competition back into the U.K. High Street banking market.

As a result of all the state aid, the two banks have been required to sell off a total of almost 1,000 branches. The government hopes this will lead to the formation of three new banks and a better deal for borrowers.

In London this is Stephen Beard for Marketplace.