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Budget 2009: £50bn in reserve for losses on bank bailouts

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21st Apr 2009
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The Chancellor is expected to retain a ‘prudent provision’ of around £50bn in public sector debt allowance in case the government doesn’t make its money bank on bank bailouts and other measures, according to a report in the Times.

This figure is likely to form part of a reserve fund to meet a situation whereby the government does not recoup the full cost of the bank recapitalisation.

The report suggests that these potential loss figures will be presented as being in line with the government’s ‘cautious and realistic’ projections about future finances.

It is unlikely that the government will sell off any of its shares in the institutions taken over or bailed out as a result of the financial crisis.

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