Are the banks going for the backdoor?

[woad]

Anyone else's ears twig at today's news that RBS and Barclays are offering to take on part of the Northern Rock "debt" out of the goodness of their hearts?

 

Ok, the national news services have been pretty light on details, but the gist - as I understand - is that RBS and Barclays are willing to assume upto £12billion of NR's portfolio, and guarantee this sum in respect to the tax payer.

 

Now me, being a cynical sod, thought "why? whats in it for them". And the most obvious thought is "bank charges".

 

The general expectation is that the test case is going to go in the consumers favour. That exposes the banks to significant exposure vis-a-vis refunds.

 

How best to offset that? Well, a nice little property portfolio wouldnt go amis, especially if it was bought at a knock-down price, with nothing other than a guarantee to pay £12b. But what if it was also a "sweetner" to the govt to ensure that a friendly judge happened to hear the charges case?

 

Sure, a decision to acquire some of NRs portfolio wouldnt have been taken lightly nor in haste, but I cant see why it has taken this long to announce. All the banks would have done a financial analysis the week the crisis broke, so why havent the banks announced until now?

 

 

Of course, there is probably a tax break in there, and maybe a way to shift some sub-prime risk onto real, worthwhile, portfolio, and I'm just being overly cynical. I've just never known *any* financial instituion doing someone out of respect to the tax-payer. The shareholders, sure. Mr Joe Public... nope!