WASHINGTON (AP) -- The day before President-elect Barack Obama takes office, the escalating problems facing major banks around the world couldn't be clearer.
Today, the British government swooped in to boost its stake in troubled Royal Bank of Scotland to almost 70 percent. It's the second major British bank bailout in three months.
Officials on both sides of the Atlantic have failed to contain the most severe credit crisis in decades. Now top officials from 10 Downing Street to 1600 Pennsylvania Avenue are scrambling to figure out how to stop the bleeding. They are trying to find the best way to prod banks into loaning out more money.
Treasury Secretary Henry Paulson says U.S. officials are talking about establishing a new government-backed bank to remove bad loans and other toxic assets from banks' balance sheets.
Still, figuring out a successful strategy for how to unclog the credit markets is a vexing challenge for Obama when he takes office tomorrow.
(Copyright 2009 by The Associated Press. All Rights Reserved.)