LONDON (Reuters) - Royal Bank of Scotland Group needs to find up to 8 billion pounds if it is to subscribe to a state-backed insurance scheme designed to cap any losses on toxic assets, The Daily Telegraph newspaper reported.
Nobody at RBS was immediately available to comment on the report, which said the bank was struggling to find a way to meet the cost of an asset protection scheme that is proving so expensive because of the scale of its exposure to toxic assets.
The government is currently hammering out the details of the scheme in which banks will put billions of pounds worth of assets into a vehicle that will ensure they are only liable for a proportion of any losses.
The government hopes the insurance scheme will give banks the confidence they need to reopen lending lines cut off by the credit crisis. Details on how much of any losses the banks will have to incur before the insurance kicks in are expected to be unveiled by the end of this month.
RBS is trying to come up with a plan that will allow it to join the scheme without handing more equity to the government or weakening its capital position, The Daily Telegraph reported.
The bank is already 70 percent owned by the government after being rescued with 20 billion pounds of taxpayer cash.
The newspaper reported that RBS was in intensive negotiations with the Treasury and the government had stepped up its efforts to hammer out the details of the asset protection scheme.
An announcement on the insurance plan had been planned for Thursday next week to coincide with results from RBS, but The Daily Telegraph said banking sources believed it would be brought forward.
Reporting by Paul Hoskins; Editing by Andre Grenon