Bank Insurance

European stocks higher on banks insurance scheme

(AP) — European markets rose Thursday as investors welcomed a British program to allow struggling banks to access government insurance against future losses on toxic assets.

By noon in mainland Europe, Britain’s FTSE 100 jumped 1 percent to 3,887.03, Germany’s DAX gained 0.7 percent to 3,873.37, and France’s CAC 40 grew 0.5 percent to 2,709.68.

Financial stocks led the markets higher, with Royal Bank of Scotland’s shares swelling 23 percent.

RBS posted an annual loss of 24.14 billion pounds ($34.4 billion) — the biggest in British corporate history — but also unveiled a massive restructuring plan that will offload many of its international businesses.

The already part-nationalized bank also said it will dump 325 billion pounds of toxic assets into the new government insurance program. The British government hopes the Asset Protection Scheme will boost lending by reducing banks’ uncertainty about the value of past investments.

Shares in Lloyds Banking Group, which is also negotiating terms of the program with the British government and reports earnings Friday, rose 27 percent. HSBC and Barclays added 6 percent and 10 percent.

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