Oct

8

UK Govt Announces 500 Billion Pound Bank Rescue Plan

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In a bid to deal with the crisis in its banking sector, the British government has anno9unced that it will come up with a rescue package of 50 billion pounds or $87 billion.

The government’s bail-out package intends pump in as much as 50billion pounds of capital into Britain’s main banks which have been struggling to survive ever since the U.S market meltdown left marks of devastation in finance markets across the globe.

The cash infusion by the UK government will be in return for a stake in the banks and will be accompanied by other measures intended to boost liquidity as well as guarantee some new bank debt in order to stimulate lending between financial firms. According to the British Treasury, among the major UK banks which have agreed to the government rescue plan are Barclays, HSBC Holdings, Lloyds TSB, Royal Bank of Scotland, HBOS and Standard Chartered. These institutions have together agreed to raise their total Tier 1 capital by 25 billion pounds before the end of the year.

The UK bail out package comes on the heels of a $700 billion finance rescue plan passed in the United States in order to take over the risky assets of finance firms and thus free up lending process.