GBP400bn UK Bank Rescue Plan Nationalises Banks

UK Bank Rescue Plan ‘Nationalises’ Banks

The Government has announced plans to restore confidence in the UK banking system with £50bn being made available to the UK’s top 8 banks and building societies.

By investing money, the Government will buy ‘preferential shares’ in the institutions.  This technically ‘nationalises’ huge parts of the UK Banking system.

In addition, there will also be a special ‘wholesale’ markets company set up to provide liquidity funding to the market with £200bn being made available.  This special company will provide access to funding for banks where for the last six months or so banks have been refusing to lend to each other.  Plus another £100bn available for the Bank of England to fund credit markets.

We welcome this bold move and suggest this will put a slight dent in the stock market as ordinary shares in Banks will take a hit as they are technically devalued but in the long run

The companies involved are Abbey, Barclays, HBOS, HSBC, Lloyds TSB, Nationwide Building Society, Royal Bank of Scotland and Standard Chartered and others banks have been invited to apply to join the scheme if they wish.

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