More aid is on the way from Britain's government for the nation's banks. And while aimed once again at the country's major banks, the entire sector, including NAB subsidiary Clydesdale Bank, looks likely to benefit.
The latest initiative, which may be formally announced tonight Australian time, looks likely to be a form of insurance or contingent government guarantee to cover losses on troubled corporate loans.
The BBC reported over the weekend that Britain's government plans to establish a dedicated insurer that will cover dud bank loans over a certain level. Banks will have to pay a premium to the insurer to cover loan losses over a certain level while the insurer will have the backing of the government. Some other media reports suggest the insurance scheme will cover troubled loans with a value of £100 billion.
It's not clear what impact the insurance scheme might have on banks' capital ratios.
This form of support appears to have won out over an alternative plan for banks to establish, separately or jointly, "bad banks" to manage their troubled assets.
An extension of the special liquidity support scheme is also likely.
One impetus to the latest support is the rampant speculation over the severity of bad loans likely to be reported by RBS (already majority owned by Britain's government under the terms of the late 2008 rescue package), Lloyds TSB (thanks largely to losses from HBOS) and perhaps Barclays, which insists it will report a profit of in excess of £5 billion for calendar 2008.
A related proposal under discussion is for those banks in receipt of British government equity in the form of preference shares (RBS and Lloyds) to convert them to ordinary shares in order to eliminate the dividend and, at least in theory, free up capital for lending.
Britain's government is increasingly unhappy at the continued rationing of bank credit and is searching for initiatives that will increase the supply of lending - assuming that in the recessionary conditions in Britain there is much demand.
Clydesdale and NAB would be minor beneficiaries of the new arrangements at best. Clydesdale has not yet opted to make any use of the arrangements put in place several months ago.