A slew of bad news from Britain this week has the potential to substantially impact the United States. While much of the public’s attention is focused on the country’s unceremonious exit from the World Cup, the world’s central bankers said Britain’s mountain of debt could leave the country powerless to launch another rescue bid in the wake of a fresh financial crisis. The group, which comprises the Bank of International Settlements, presented a frightening picture of the impact of a second banking emergency on heavily indebted nations such as Britain, The Independent reports.
According to the paper, The Bank of England’s Governor, Mervyn King, has estimated that the Government has pumped as much as ?1trillion ($1.5 trillion) of taxpayers’ money into the banking system. Billions of pounds were spent part-nationalising the Royal Bank of Scotland and Lloyds Banking Group, as well as fully nationalising Northern Rock. Measures such as the “special liquidity” plan propped up other lenders and prevented the system from freezing up.