13Oct
Banking bail-out details announced
The Treasury has announced details of which banks are receiving
money as part of its plan to bolster the system with more capital
and liquidity.
Money will be provided to the Royal Bank of Scotland, plus Lloyds
TSB and HBOS when their merger is complete, at a combined total of
£37 billion.
It is hoped this will ease immediate liquidity concerns and also
boost confidence in the system, kick-starting interbank lending and
leading to the banking system providing more credit to
consumers.
Such a development would lead to more mortgage finance becoming
available.
Barclays said it would not be seeking the government money, stating
it would raise £6.5 billion from other sources and save
£2 billion by not paying shareholders a final dividend this
year.
BBC business editor Robert Peston said today may go down as
"perhaps the most extraordinary day in British banking
history".
