neenie
Member since 5/05 22351 total posts
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Britain unveils $84B bank rescue plan
LONDON, England (CNN) -- British Finance Minister Alistair Darling on Wednesday announced a £50 billion ($87.4 billion) rescue package for UK banks.
British Finance Minister Alister Darling has announced a £50 billion rescue plan for the country's troubled banks.
The plan will inject money into the banking system to provide immediate relief and free up lending, a Treasury statement said. The government will give the largest banks £25 billion ($43.7 billion) with another £25 billion available if desired.
The government will also guarantee the lending that banks make to each other, the Treasury said.
Darling made his announcement shortly before markets opened in Britain. London's FTSE 100 opened down 2.5 percent.
The chancellor said it was important for the British government to "send a clear message" that it can step in and help the financial industry amid the global economic crisis.
"We will stabilize the position, we'll help banks restructure so they can rebuild their strength, and also do everything we can -- whatever it takes -- to ensure that we get that stability and we try and steer our way through what is a pretty turbulent period," Darling told CNN affiliate ITN.
Eight British banks agreed to the rescue plan, Darling said, after discussions that ended only hours before he made the announcement.
They are Abbey, Barclays, HBOS, HSBC, Lloyds TSB, Nationwide Building Society, Royal Bank of Scotland, and Standard Chartered.
Lloyds TSB recently agreed to take over struggling HBOS. Spanish banking giant Santander -- which owns Abbey -- recently took over two other British banks, Alliance & Leicester and Bradford & Bingley.
The government also said Wednesday it is increasing the amount of long-term funding it is providing to banks under a special liquidity plan announced in April. Since then, the British government has made more than £100 billion ($176 billion) available to banks; Darling said that amount will now be increased to at least £200 billion ($351.7 billion).
Asked whether the British government was acting too late amid the crisis, Darling said the measures announced Wednesday are the result of weeks of discussions with the banks.
"This is a major step," he told ITN. "Never before have we been in a position where the government is actually saying to banks, 'You've agreed with us that you're going to raise more capital. If you can't do it in the normal way on the markets, we'll actually provide the funds to enable you to do that.'"
On Tuesday European Union finance ministers meeting in Luxembourg agreed to raise the minimum guarantee for bank deposits across member states.
The meeting took place as Iceland seized control of its second largest bank Tuesday and UK bank shares fell sharply, despite strong gains on stock markets in London, Paris and Frankfurt.
French Finance Minister Christine Lagarde said EU finance ministers had agreed to raise the minimum guarantee of bank deposits to €50,000 ($68,600) across all EU member states. The amount was less than had been expected but Lagarde said the figure was agreed on to enable smaller EU countries and economies to meet the minimum.
Source
(ETA link for source)
Message edited 10/8/2008 4:49:48 AM.
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neenie
Member since 5/05 22351 total posts
Name:
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Re: Britain unveils $84B bank rescue plan
In the news conference they just had, they said that it differed from America's plan in the sense that ours was investing in bad debt while theirs was buying shares in banks to give them more working capital. Either way....
Between this, Iceland, the Asian markets.... OY! 
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