UK: [PM] Gordon Brown hails rescue package

The Telegraph ^ | 10/8/2008 | Jon Swaine

[bruinbirdman]

The plan, which is expected to use £50 billion of taxpayers' money, will see the banks part-nationalised in return for a cash injection allowing banks to bolster their depleted balance sheets.

"Extraordinary times call for bold and far reaching solutions," the Prime Minister said, in a brief statement before the unveiling of the package by the Chancellor, Alistair Darling.

"This is not a time for conventional thinking or outdated dogma but for fresh and innovative intervention that gets to the heart of the problem.

"These decisions on stability and restructuring are the necessary building blocks to allow banks to return to their basic function of providing cash and investment for families and businesses."

The rescue plan was finalised at an unplanned Downing Street meeting yesterday evening between Mr Brown, Mr Darling, the Bank of England Governor Mervyn King and the Financial Services Authority chairman Lord Turner.

As part of the deal, the Government has also demanded a boardroom shake-up at Royal Bank of Scotland (RBS), one of the most troubled banks. Sir Fred Goodwin, the bank's chief executive, and Sir Tom McKillop, the chairman are expected to leave.

The Government agreed to the deal after the share prices of the high street banks collapsed in another day of turmoil on the stock market on Tuesday. Investors panicked over what was seen as the Government dithering after Mr Darling refused to disclose details of any proposed rescue.

Shares in RBS, which owns NatWest, Direct Line and Coutts, fell by almost 40 per cent to a 15-year low. Its stock market value has now fallen by more than 80 per cent in the past year. Other banks experienced sharp reductions in their share prices with HBOS falling by 41.54 per cent, Lloyds TSB dropping by 12.93 per cent and Barclays down 9.24%

[Caipirabob]

I'm so depressed that our nation has implemented an economic plan that European socialists like so much "They'll try it at home".

Socialism...destroyer of nations. Now, at your doorstep...

[bruinbirdman]

"I'm so depressed that our nation has implemented an economic plan that European socialists like so much "

When Paulson speaks the markets listen. DOW reverses from +65 as Paulson begins to -189 a half hour after he finishes.

yitbos