British Bank Rescue

From Australia:

Hank Paulson’s a wimp. Alistair Darling, Britain’s Chancellor of the Exchequer, has shown him what a real bailout looks like, throwing £500 billion worth of support, including up to £50 billion of taxpayer-sourced equity, at the UK banking system.

The degree of desperation evidenced by the measures underscores the severity of the crisis afflicting the UK banks. The eight banks who have already signed up to participate in the rescue package include Britain’s biggest banks – Barclays, Royal Bank of Scotland, HSBC, HBOS and Lloyds TSB among them.

With its biggest banks needing to refinance more than £50 billion of maturing debt within the next six months, their share prices in freefall and access to liquidity drying up the government had little choice but to try to do something dramatic enough to restore some confidence – and some capacity for the banks to maintain lending – to its system and economy.

The package of measures is certainly comprehensive and falls within the “whatever it takes” approach to responding to a crisis.

The government will make £200 billion of short term liquidity available to the banks and says it will extend and widen its facilities in whatever way is necessary to ensure the stability of the system.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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