Treasury throws £50Bn lifeline at banks
October 8, 2008 by Admin
This morning, Britains banks will be saved by the treasury. So deep is the financial crisis that Alistair Darling has stepped in and provided a lifeline to the city in the form of a £50bn rescue plan.
Other measures the Treasury will introduce are a guarantee for Britain’s £2,000bn of retail and corporate savings. Meanwhile banks are under continued pressure to raise further capital as the cash shortage bites.
Sandy Chen at Panmure Gordon warned: “Government bailouts will only prolong the process of structural readjustment, which includes further 20% falls in US and UK house prices”
The Government will take stakes in RBS, HBOS, Barclays, Lloyds TSB and HSBC. The size of the stakes will be determined by each of the banks capital strength. RBS are in line for the biggest injection as the weakest in the sector.
