13 Oct

Banking bail-out details announced

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".
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