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| £250bn Lloyds asset deal on cards | £250bn Lloyds asset deal on cards |
| (20 minutes later) | |
| Lloyds Banking Group is close to a deal with the government for a £250bn asset insurance scheme, the BBC has learned. | Lloyds Banking Group is close to a deal with the government for a £250bn asset insurance scheme, the BBC has learned. |
| The agreement could mean the taxpayer's share in the bank increasing to 60% from its current level of 43%, according to sources at the Treasury. | |
| It is understood the deal has not yet been finalised and is unlikely before Friday afternoon. | It is understood the deal has not yet been finalised and is unlikely before Friday afternoon. |
| The plan would mean the government insuring up to £250bn of assets which would be paid for in non-voting shares. | The plan would mean the government insuring up to £250bn of assets which would be paid for in non-voting shares. |
| It would also mean the bank swapping some of the government's existing non-voting shares for ordinary shares - thus taking the government's overall stake up to 60%. | It would also mean the bank swapping some of the government's existing non-voting shares for ordinary shares - thus taking the government's overall stake up to 60%. |
| The deal is part of the Treasury's taxpayer-backed scheme to insure banks' riskiest assets against further losses. | The deal is part of the Treasury's taxpayer-backed scheme to insure banks' riskiest assets against further losses. |
| Confidence | |
| It was put forward by Chancellor Alistair Darling in a bid to restore confidence in the banking sector. | It was put forward by Chancellor Alistair Darling in a bid to restore confidence in the banking sector. |
| RBS was the first bank to sign up, announcing last month that it would put in £325bn of toxic assets. | RBS was the first bank to sign up, announcing last month that it would put in £325bn of toxic assets. |
| BBC Political Correspondent Carole Walker said some politicians believed full nationalisation would restore confidence in the banks more quickly. | |
| "There are a number of people in Westminster who believe we are getting closer and closer to full nationalisation," she said. | |
| "[They think] it would be simpler and easier for the government to nationalise the banks and that in the long-term it would save the taxpayer a lot of money." | |
| Some have pointed out that the government has put more money into RBS than its total share value, she added. |