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Britain unveils major bank rescue plan
Britain's finance minister Alistair Darling unveiled a 50b pound rescue package for the banking system on Wednesday, which includes a major injection of capital into banks.
- Agencies
- Published: 08:43 October 8, 2008
- offer banks short-term liquidity
- make new capital available to banks
- give the banking system enough funds to maintain lending in the medium-term.
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London: Britain's finance minister Alistair Darling unveiled a £50b rescue package for the banking system on Wednesday, which includes a major injection of capital into banks.
Finance Minister Alistair Darling said in a statement the plan would:
The decision follows days of crippling pressure on high street banks, some of which have lost nearly half their value on the stock market amid investor fears they could collapse if they are not handed a multi-billion-pound liquidity lifeline.
Darling and Prime Minister Gordon Brown will hold a press conference later on Wednesday in which Brown is expected to say bold and far-reaching action is needed to tackle the global financial crisis.
The European Commission, which must approve state support programmes, said it had been informed of the plan and would make a decision quickly once it had details.
Darling and British Prime Minister Gordon Brown met the heads of the Bank of England and Financial Services Authority (FSA) on Tuesday for what the government said were talks on stabilising the banking system.
"We have been working closely with the governor of the Bank of England, the FSA and the financial institutions to put the banks on a longer-term sound footing," Darling said in a televised statement following that meeting.
It was unclear whether Britain's rescue plan, which follows the US decision to provide more than $700 billion in a bailout of banks and financial institutions, would be enough to restore market confidence following days of near panic.
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