LONDON — Britain announced a second rescue plan for the country’s ailing banks Monday, hoping to thaw frozen lending by offering to insure banks against large-scale losses on bad assets they already hold.
Stock investors, however, were spooked by fears that the second bank-rescue plan in three months was a step toward full nationalization of one or more banks. Fears focused on Royal Bank of Scotland, which disclosed that it is likely to report a record full-year loss of as much as $41.3 billion; its shares closed down 67 percent.
Prime Minister Gordon Brown said Monday that the government has increased its stake in the bank to almost 70 percent but declined to say whether he believed the bank will eventually be fully nationalized. The government took a stake under a first round of bailouts late last year.
