Taxpayers will be committed today to providing more than £50 billion to
bail out high street banks in an attempt to avert a cataclysmic failure of
confidence.
Alistair Darling was due to tell the City in an early morning announcement
today that the sum will be available for “investment” in banks that have
demanded help from the Government. The drastic rescue move is designed to
help to reassure savers and to kickstart the paralysed credit markets by
encouraging banks to lend to each other again.
After meeting Mervyn King, the Governor of the Bank of England, Downing Street
was forced to make the announcement earlier than it had intended because of
fears that a second day of hammering for bank shares had made leading
institutions vulnerable. HBOS shares slumped by 42 per cent yesterday, Royal
Bank of Scotland was down 39 per cent and Lloyds TSB dived 13 per cent in
another torrid day for the banks.
The taxpayer will take a stake in banks that seek assistance through the
purchase of preference shares, which the Chancellor will say could mean
ordinary people making a profit once the crisis is over. Holders of
preference shares are the first in line for the payout of dividends but they
do not carry voting rights. The bailout is expected to be structured so that
the Government also receives rights to ordinary bank shares at low prices,
holding out the prospect of profits if and when banks recover. Mr Darling
will also announce extra help from the Bank of England to ensure that the
banks have enough cash to run their day-to-day activities.
The collapse of the online bank Icesave, leaving 300,000 British depositors
with no certainty that they will get their £4.5 billion of savings back,
added to the urgency for a scheme to restore confidence. The
part-nationalisation of the banks — “recapitalisation” will be the term used
by Mr Darling, while Gordon Brown will refer to a “stability and
restructuring plan” — comes amid fresh evidence that the economy is
deteriorating quickly because of the drying-up of credit. The British
Chambers of Commerce said that Britain was now in recession and faced
350,000 job losses in the next year. Confidence had collapsed in the
manufacturing and services sectors, it said, and it joined the CBI and other
employer groups in calling for an immediate interest rate cut. The Bank of
England’s rate-setting committee begins its regular monthly two-day meeting
today and is widely expected to cut its base rate by half a percentage point
to 4.5 per cent.
The severity of the seizure in credit markets worldwide was underlined when
the US Federal Reserve took the unprecedented step yesterday of offering
short-term loans beyond the beleaguered banking sector to large US
corporations. A hint from Ben Bernanke, the Chairman of the Federal Reserve,
that he was prepared to cut US interest rates failed to lift the gloom. Wall
Street dived, the Dow Jones industrial average sliding by 508 points last
night to 9,447.11.
Mr Darling’s restructuring scheme has echoes of a successful operation by the
Swedish Government in the 1990s to rescue its banks. Putting in taxpayers’
cash means that the equity value to ordinary shareholders will be reduced,
which is why the shares have taken a battering in recent days.
While no single bank wants to be the first to take up the Government’s offer,
regarding it as an admission of capital weakness, at least four banks —
Royal Bank of Scotland, Barclays and the prospective merger partners Lloyds
TSB and HBOS — were inching towards agreement in principle last night. It
was not clear whether HSBC would join.
Banks still wanted to see the detail. They want the interest they pay on the
preference shares to be as low as possible and the equity rights given to
the Government as small as possible.
Ministers are putting the blame for disclosures yesterday morning firmly on
the banks, who were accused of briefing the BBC about a meeting between Mr
Darling and Barclays, the RBS and Lloyds TSB and other institutions on
Monday night. At that gathering Mr Darling was urged to speed up his bailout
plans. The leaking of what went on was denounced as irresponsible by Downing
Street. For their part, the banks accused Mr Darling of dithering for not
going ahead with his announcement earlier.
After the meeting, Mr Darling confirmed that he would be making a statement
before the London stock markets opened today and another in the Commons
later. It was believed that the first would come at about 7am. Although he
gave no details, he said that the aim was to put the banks on “a longer-term
sound footing”. The National Economic Council of senior ministers and
officials, formed by Mr Brown last Friday as an economic “war Cabinet”, will
meet at 8am.
George Osborne, the Shadow Chancellor, reiterated that the Tories would work
with the Government, although he added: “We must make sure that any support
from the taxpayer is used to help save small businesses from closure and
enable families to stay afloat, not to pay the bonuses of bankers. We should
be rescuing the banks to rescue the economy, not to rescue the bankers.”
The go-ahead for today’s historic announcement, providing the astonishing
spectacle of a Labour government bailing out the banks with taxpayers’ help
and Conservative Party support, came at a meeting in Downing Street last
night between Mr Brown, Mr Darling, Mr King and Lord Turner of Ecchinswell,
the chairman of the Financial Services Authority.
Mr Darling, Mr King and Lord Turner initially met in No 10 as the tripartite
committee responsible for maintaining financial stability before being
joined by the Prime Minister. President Bush and Mr Brown had talks
yesterday about the need for co-ordination of international efforts to
tackle the crisis.
John Cridland, the Deputy Director-General of the CBI, said: “The Chancellor’s
much-anticipated announcement of capitalisation will herald the first
essential step on the road to financial recovery.”
Martin Slaney, head of derivatives at GFT Global Markets, said that the FTSE
100 index was likely to open 100 points lower today after further heavy
falls on Wall Street. “What the market wants, the market is unlikely to get.
After the constant ‘whatever is needed’ reassurances from the Government
there is every chance the reality does not live up to the hype.”
He said that the “best-case scenario” would be a £50 billion injection of
funds and a simultaneous 0.5 per cent interest rate cut. Mr Slaney added:
“The market’s loss of confidence is seemingly only going to be
resolved with an extensive co-ordinated G7 response.”
James Hughes, an analyst at CMC Markets, expected a small improvement in the
markets but feared that it could prove to be short-lived.
Money Central
The
six safest places for your savings
Which
banks own which brands - the list in full
The
deposit protection rules in full
The bail-out was unavoidable. Better to pay £2000 per person to halt the crisis, than £30,000+ for it to continue. Because that is how much it will cost through loss of jobs, pensions, savings etc. People should set aside the how we got here for another day and control the crisis first.
dominik, london,
This should provide the mechanism to keep UK banking functionality. Now how about quantum tempore: what are we in for?
There is no compelling reason for public money to be used to shore up stock prices. I will resist the temptation to speculate on why news commentators trail rumours linking the two.
Terence Park, Burnley,
NDG, Japan, I think you'll find the point "thinking positively" is making is that there's no point complaining about this, it doesn't achieve anything.....let's deal with it and get on with it....and he's not one in a million, there are loads of us who prefer action and positivity to whinging..
Glenn, London,
No Tom you fool, savers are not investors. You put money into a bank for safe keeping it is not speculating. The money is apparently covered by 2 compensation schemes you don't expect a state scheme to possibly fail. Once again this useless gov't and the FSA have failed to safeguard us.
Neil, Leeds, UK
Feel sorry for the Downing S t tea lady. She/He or it, must be sick to death of all these summits.
ronnie, bucks, UK
If the banks won't give us a loan why should we give them a loan?
Bill, Dundee, UK
I transferred money out of my instant access saver at the weekend - processed on Mon 6/10/08. My statement shows this transaction. Today - 8/10/08 - Icesave grabbed it back!! My statement says: 'Correction item posted' and the amount I transferred out is shown as back in my Icesave account
PVD, Ipswich, UK
Woudn't our taxpayers money be of more use say investing in other thinks other than banks ?
Surely the money that has already been used into the system is more than enough. The more i think we put in the worst the situation will become.
P Lee, Gwent,
To: Ronnie in Bucks:
You may have seen it in the UK news; but here in the USA, the AIG executives did just that here, in sunny California, right after our bailout.
Daniel Evans, Rancho Tehama, California, USA
Comments along lines putting savings in bank is an investment therefore have to accept risk quite absurd. Many ordinary hard working people put savings away to safeguard theirs and families futures, as opposed to the have it all now living off credit brigade.Savers should not pay for banks mistakes.
andy, cambridge,
They are taking us for mugs!
Warren, Southport, UK
This needs to be good there is no room for error or half measures it's got to be a one stop fix. Hindsight is a great thing and lots of if only won't be to helpful now lets just get it fixed.
steve, london, uk
Like most people under 30, I have little savings, just debt. If these measures ensure it is more difficult or impossible for my and subsequent generations to get out of debt and save whilst ensuring the banking system continues to generate wealth for a few there will be civil unrest.
Dr J., London,
Mr Brown, ""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."
And then he virtually nationalises failing banks !
Mike, Sole Street, England
The banks have shown that measured by competance, instinct, performance or trustworthyness they have neither the track record or structures to be trusted to use our money for any purposes that are likley to be of assistance to home buyers (not property investors) or the real economy. Why do it?
WAK.Coe, Llandudno, Wales
What would I prefer to do? Throw more good moeny after bad or let the lot fall down the pan? I know, let's toss a coin, heads I lose everything , tails I lose everything. Not much choice really?
Evan Owen, Harlech, Wales
How the mighty have fallen. Let them sup champagne from their swimming pool.
ronnie, bucks, UK
Where is all the money that has been "lost" gone and who has it?
DAVID, SYDNEY , AUSTRALIA
The house of cards is collapsing. For 30 years the Uk has been building debt, Thatcher kept us going by selling off our utilities and deregulating the financial services and Blair by changing nothing and having a war. Now we have to pay up. A wealth tax would be a start.
Clive Stringer, Devon, England
I think that it is despicable that we all have to be held account for the poor decisions made by a bunch of incompetent investment bankers
Anna Murray, London, UK
The bank's name is Blackhole Investments.
Stephen Pain, Odense, Denmark
"We should be rescuing the banks to rescue the economy, not to rescue the bankers.” Dead right. Our economy, the businesses that employ, feed and transport us, needs a functioning credit system, but we can do without a lot of the overpaid and arrogant bankers. BUT can Darling make sure of that?
Rob, York, UK
Kay zum Felde of Germany.
It isn't the 'natural' law, it is the law of this particular. man-not-God-made economic system we live under. It's called 'capitalism'. And don't say it doesn't matter, because although it may not matter to you it does to the rest of us.
Eileen O Conor, Cordoba, Spain
It is easy to mock Darling he is doing his best pity his best is rubbish.
I find I cannot sleep at night due to the banking panic as my mattress is to close to the ceiling.
Michael Fennelly, Worthing, UK
I used to dream that I owned a bank and when I woke up this morning I did!
Richard Perkoff, London,
Bank shares are a bargain at the moment, I'd buy some if my cash wasn't stuck in Icesave.
RobD, Bracknell, UK
So the people running the banks that got us into this mess are being given 50 billion. No resignations?
P. Wilson, Brighton,
Taxes will RISE to pay for the borrowing required for the banks - this will WIPE OUT any profit from our "investment" in the banks as shareholders. And no control over how the banks use the money?? This is writing a blank cheque for compulsive gamblers who have offered to share their "winnings"!!!
Natalie Christie, London,
America is bailing out American banks, Europe the European banks and so on.
The countries who won´t do that will pay dearly, because it´s all Beggar-thy-Neighbour-Policy.
Tom, Dick and Harry will pay in the end.
Björn Werner, Nuremberg, Germany
Dear dear Thinking positively, UK
You are one in a million!!!! Thank you so much for your wisdom and hope. People need to get a grip on the power of common consensus. Anyone who doubts this energy must deny the fear and loathing they are currently experiencing. Good luck to all good people.
NDG, Tokyo, Japan
Here in Germany things are quite difficult, too. But the main difference: everybody, the media, the government etc keep telling everyone not to worry things aren't bad, and not to panic. In the UK there's been doom and gloom for months. The end of the world is nigh. This needs to change-quickly!
Ursula Friend, konz, Germany
If the Government can come up with a £50billion rescue plan for the banks within days, why can't it do the same for struggling SMEs which are the backbone of UK innovation? Knowing how the EU works, the recently announced EU plan to help industry is small and likely to have bureaucratic red tape.
Janusz Adamson, Stockbbridge, UK
G7 Brown et al fixed the Inflation rate calculation years ago thus erroneously depressing interest rates and inflating asset prices and the "economic boom" Brown was so proud of.
The pressure to be reelected a third time with the incentive of becoming Premier may make interesting analysis.
John Millward, Newport, Wales
Brown and Darling seem to have gone for the Carol Vorderman solution, “why not roll all your debts into one even bigger debt?”
Brian Christley, Abergele, UK
Where have the Saudi's been with all their money?
They don't seem to have a cash crisis over there !!
So thanks for nothing.
David Barton, Truro, England
Most people have their 'savings and investments' tied up in property, pensions, endowments etc. Why is it that cash deposits are seen as the only form of investment that can't be allowed to be 'at risk'?
Chris, Somerset,
If this crisis was not so serious the reaction of UK Plc would be laughable, in the face of the criticism for so called "state help" that you always accused the Club Med (how kind to use such a nice descrption, not at all insulting, isn't it?) of. No Italian or Spanish bank has been nationalised...
Paolo, Milan,
this problem is caused by greedy borrowers and lenders - let them sink.
Why should my tax money bail them out
Mike, Sole Street, England
So James, London, where do you recommend keeping your savings then? Do share with us your failsafe plan ....
susan, glasgow,
I save 'safely' but now have to pay for an incompetent regulation of banks over the last ten years.
Under NuLab you are better off unemployed, claiming benefit
Mike, Sole Street, England
So lets get this right, we give the banks, (who created this mess), £50 Billion (ish), that may or may not be paid back to us. So that the banks can lend the money back to us at interest.
Why people cannot see that this is theft on a grand scale boggles the mind.
john, haslingden,
Yay...lets give £50bn so the banks can continue lending recklessly.
Actually, they are all insolvent...so thats what the £50bn is for. It will not make them lend money.
Ritchie, strasbourg, France
If the governments in charge of the banks now , would it be so kind , as to tell the banks to stop increasing bank charges to £35 per item please. ( Barclays )
Nick Dixon, Sutton Coldfield, England
Mt Tatek - thats pretty cheap to safeguard your pension , house etc etc - I really wish that those who don't understand the banking system would stop going on about fat cats etc etc...........
Tim McLachlan , Richmond , UK
If the country can suddenly afford £50 billion why do we have people who cannot afford their heating bills ?
Mike, Sole Street, England
Erm, Lucas ...
yes ... that's exactly what pref shares do - they give the taxpayer a share of the profits in the years to come - even better - they get the 'first' share of profits before equity holders. This is modelled on Buffett's investment in Goldman Sachs and will prob reap similar returns
Vaccav, Sydney, Australia
i have small business in the gardening industry which as had its worst year everver we are very closeto goingunder do i get any help from alister darling or gordon brown no , ihave just been charge by barclays 900 pound in referal charges there is no help from barclays to this comany
david hodkinson, northwich, england
OK, our British banking system is now controlled by the British people so let us immediately apply a salary cap, reduce large salaries and do away with non performance outlandish bonus culture. Banks and financial groups paid themselves heavily last January and everyone knew whatw as coming. FRAUD!
Budd, London, UK
The political implications of this mean a complete change implosion across all Government policy, strategy and forward planning.
The way forward now is for the people to decide on a new mandate via a general election.
WILLIAM GRIERSON, KIMPTON, UK
What is to stop the Chief Executives of the banks awarding themselves massive pay rises and obscene bonuses from our money? They might find it difficult to live on just their over-inflated salaries alone.
Neil, Gloucestershire, England
For Lucas, NuLabour (i.e. the foolish Brown) played a significant part in causing this, along with Alan Greenspan. Labour is as capable of fixing this as a rapist is of restoring his victim's self esteem. If only Osborne had the balls to tell us what the Cons will do if they get into power...
clive, enfield,
i hope Darling put a cap on the margins banks can charge above BoE interest rates otherwise the banks are only going to continue to charge too higher margins and make money off the tax payer who provided them the money to 'rescue' them in the first instance.
ben, manchester, UK
TO James, Beijing, China
Icesavers are not greedy. Anyone that saves is prudent.
This whole mess has been caused by debt not savers.
This year many banks were offering rates above base rate by currently banks are borrowing at 1.5% above base.
Landsbanki posted a profit last qtr, FT praised it.
jules, Exeter, UK
Everyone should calm down. By withdrawing funds immediately from banks which are concerned is likely to tip them over the edge.
YES, bankers should get a serious wage cut ... but
NO, don't leave the banks to bust ... many businesses will go bust, but even more would be bust if the banks go BUST
Andy, Newcastle, UK
Prudence has been replaced by panic
Mike, Sole Street, England
Property market has gone over the cliff dragging the financial sector with it. Now its a race to the bottom and the Labour Government is determined to be the winner!
Bart Codger, Blackwood, UK
The sub-prime lending in America, coupled with opaque financial products to sell the loans on to the gullible, have achieved what Socialists have wanted for 100 years - the nationalisation of the banks. Tony Benn must be loving this!
Nick, London
Nick Giles, London,
Why do some of these banks that are busy buying other banks/assets need our tax pounds!! If they have money to buy off distressed banks/assets surely they don't need our tax pounds?
Will the government make £50bn available to British citizens who find themselves in financial distress as well?
M, Kent, UK
The term leading banks refers to those elite who already own all the wealth.
This is an out and out robbery of the people which they have not even bothered to disguise.
This is not the first time these people have bought up England for 'pennies on the pound'. For them it is a game.
Louise C. Zorron, Amsterdam,
This is proof that the illusion perpetuated by this govt that we live in a free market is rubbish. I have nothing against the govt intervening for the good of everybody but they don't stop rich people avoiding paying tax through legal loopholes or buy to lets pricing out locals. It's a big con!
Richard, london,
Why are we rescuing the bank shareholders?. Tax payers with shares in other business areas are taking a massive hit. Are the government going to bail them out as well?? If so, what with. Brown has already spent all of the windfall taxes and is still promising extra to the middle classes.
Susan Rochon, Redruth, UK
Why should the taxpayer bail out these people who have caused this mess by their own incompetence and greed.If Mr.Taxpayer had trouble paying his mortgage through no fault of his own would the banks bail him out?I doubt it very much.
d.cowan, liverpool, uk
So how exactly will HM Government take "shares" in the Nationwide Building Society?
Alan Hargreaves, Holywell, UK
Look for the combined NR and these new bits of public ownership being parcelled up together and, in a few years time, given away at a rock bottom price to our "European friends". So far this part of the family silver has escaped . I do not say GB and co caused this, but this is a chance not to miss.
D.L. Stephens, York, England
Pub Greed is falling apart.
Error Flying, Casablanca,
Excellent idea!
Barclays bought Leighmans because it was going cheap.
The banks are going cheap.
Now is the time to play the banks at their own game. Buy the banks and give the taxpayers the fat cat bonus's.
There is a God, after all.
Ivan de Nemethy, London, Murder Mile
The government are just too far behind events. The demise of Northern Rock more than a year ago should have been a loud wake-up call but Brown was too busy pretending to call a General Election.
At then end of every Labour government in history, this country has been left in economic chaos.
R.McGeddon, London, England
My grandad always told me don't vote Labour they will bankrupt the country.
I wish he were alive to see this lot.
paul smith, lowestoft, england
So when the over-indulged bank bosses screw things up the tax-payer picks up the tab. It just shows how incompetent a bunch we have at both political & financial levels. We are being hung out to dry by this government and we need a complete change of direction.
Don Smith, London, UK
The momentum is such that the banks can siphon $700billion or $700 trillion into the financial sector and it will not make one iota of difference. This is worldwide and beyond control. Wheelbarrows and loaves of bread costing £50 is not too far away...
charles, Cirencester, Great Britain
Please please can we have an election and get rid of this govt.
They are so busy being 'prudent' that the world has moved on. I fear even this action is too late for UK plc.
tim , warks,
I have a feeling, these rumours are slightly off the mark. Darling may offer banks of "recapitalisation" if they want to take it up, but are not forced into doing so. Chances are, it will be the smaller banks that will want it. The big three simply attended on behalf of overall banking community.
B, LONDON,
Love all these pessimistic talk, talking ourselves into trouble. Failing banks will lead to wider business failures as companies will be unable to finance growth or refinance themselves when loans come to an end. Time people started talking positive and talked themselves into a recovery.
Thinking positively, UK,
if we as tax payers are propping up the banks should we still pay back our loans /mortages? after all they (banks) have been saved and therefore do not have any debts to recover from us?
sure logic say the tax payer looses out - all over and the big orgs and and govt win again!!!
mr singh, durham, england
B of E must cut interest rate. Banks have their cash reserves + the 50 bn . Combined these will a) set the bottom b) calm idiot bankers c) permit the economy to work...DO NOT WITHDRAW ALL YOUR CASH..I was tempted 2 as well, it will destroy the above and your money will soon be worth 0
jd, rome, uk
The bankers and politicians are robbing the tax payer to try to save themselves. How nice of them. I suspect this just means the UK will have a much lower standard of living for the next generation, while the bosses take the bonuses and retire with our millions.
john, london,
I am very concerned about the term "leading banks". So will the Government deem Heritable Bank to be a "leading" bank? If it doesn't then isn't this discrimination against a smaller (albeit Icelandic owned) UK bank.
Phil B, New York, USA
I hope the government does proper due dilligence on these banks!
They had the opportunity last year to fess up to their exposure and they didn't cough.
Now the tax payer is footing the bill for dishonestey and corporate greed.
'Prudence' - my *rse...
chris, st austell,
Maybe a few more people should listen to "David Icke" its not like he hasn't been predicting this for ages! Just a shame the people in power kept discrediting him, so people would think he was a nutter. This crash is going to make the rich richer and the poor poorer without a doubt!
Ian, Budleigh Salterton, Devon
The thing we are never told is where does the government get all this money from? I assume it has to borrow it from somewhere? Where from?
Robert, Manchester, UK
when does the UK coal industry and car industry get to be bailed out?
or even the local small business's who do an honest days work,.
looks like the Champagne Socialists of NL are sucking up the Tories alley with the rest of the London deadbeat spivs
Vote Labour,.. get Tory ideology
sid, london,
Many with money-purchase pension schemes have switched out of stock-market funds and into "safe-haven" cash funds. A pension is protected against failure, but not the underlying investments. Those cash funds are invested in deposits with banks. If banks fail, we lose pension - we are helpless.
Neill Foster, Aylesbury, UK
Seems we in the US and in the UK have the same issue that no one is talking about. The core of it is too many of "Our" jobs being offshored to low cost countries like China, India, etc. Friends, we nee to join hands and take Our Jobs back...over a few pints of course!
David, Michigan, USA
Right so thats 50 billion of OUR MONEY. Do WE get a share of those fat cat profits in years to come? One rule for them and a different one for us. Somethings badly wrong with the system . . . can NuLabor fix it?
Lucas Tatek, Herts., uk
Of course people who save with banks are taking a risk! The people who used the Icesave account were offered a 7% return on their money. A higher return, a higher risk, a higher chance the saver will lose all. That's the way it has always been and should be. The 'Icesavers' were greedy too..
James, Beijing, China
Lets clear up the confusion over investors/savers:
People who invest money are taking on risk with the expectation of getting a return.
People depositing money in a saving account are entrusting their money for safekeeping. The interest is merely an incentive to attract savers to that institution.
JB, Seef, Bahrain
Be very careful what you wish for. I would willingly chip in as a taxpayer to ensure the financial system exists. Silly remarks about bailing out bankers and let them go to the wall are poorly thought through. I would triple the amount offered in the plan and ensure confidence returns.
sarah, london,
Banking bosses have been well paid because (a) they have rare skills (the "market forces" argument) and (b) they take great risks. Since it's now obvious they are actually (a) pretty clueless and unskilled and (b) get rescued by the taxpayer if things go wrong, shouldn't we expect some pay cuts?
Chris K, Cheltenham, UK
I am a saver..with a credit union..just got paid out £1800. I did not want interest...just the incentive to save, Its called banking the old fashioned way and it is the future. Let the banks die and the fast buck buggers with it. Lets get back to work and the decency of real work.
Stephen Moprris, london, uk
Sadly the people of the world who work their backsides off, scrimp and save and live on little to no credit are the ones who are going to have to pay for the "fat Cats." One bank here had a CEO for 3 wks. He was paid 19 MILLION to leave! That's $23,000 and hour! Crooks shouldn't get paid.
Aimee-Michelle Gower, Collinsville, Illinois, USA
James, London; Are you seriously saying that people who save money are taking a risk?
NDG, Tokyo, Japan
Is this a Public Private Initiative?
David, Dubai, UAE
I am from Iceland and I am sure you will get all your money back in Icesave. BUT I think that british taxpayer and future taxpayer ,your children should not have to pay back those 50 bn to rescue the bank system, those money will never return back. This swedish way is a stupid idea.
Agust, Reykjavik, Iceland
We shouldn't be bailing out anyone. Not banks, not individuals.
You make an investment, you take a risk. For that risk you get a reward when it works out well, and you lose when it doesn't.
AND THAT INCLUDES SAVERS WITH BANKS.
NO BAILOUT!!
James, London, UK
faux pax. Do not re-capitalise and do not even think of cutting interest rates. Someone has to go to the wall and it should not be the tax payer.
James Black, Sidbury, UK
My pension fund had a £1.3m money market deal with a threatened,major UK clearer maturing yesterday(Tuesday) and try as I might I could not get those funds out of that bank. Every excuse was given and every barrier erected right up until close of business.
Very worrying what today might bring.
A.M. Williams, Cradley Heath,
Simple really! Scrap ID cards. Leave Iraq now. Raise tax again on gas-guzzlers. 20p on a packet of 20. 10p on wine. No local councils re-org. nor new school exams till we can afford them. Make income tax gradually fairer by e.g. taxing greediest tycoons. V.Cable to chair all-party brainstorm. More?
Noel Thompson, Tavistock, Devon,
I am a Republican in the USA I have been warning of the destruction that the Democrats caused America for 20 yrs..they have held positions of power in all almost all large urban centers and have run them into financial ruin with socialist ideas now they have ruined the worlds banks! Blame Obama!
Denn, Milwaukee, usa
Hi,
the crisis has been a result of the greed of people who wanted to be more intelligent than others. Remember 2001 the dot.com crisis, same story. The money of the people is simply erased.
Well, of course it doesn't matter, since such a crisis will occur from time to time. That is a natural law.
Kay zum Felde, Frankfurt am Main, Germany
The banks won't fund themselves. Use the 50bn to create a new bank to lend directly to industry and take deposits and let the banks fail. They created their model and should stand or fall. Others sectors have to. The markets have lost complete confidence in banks and this will not restore it.
Patrick, Taipei, Taiwan
Plea heard from the destitute during the Great Depression: "Buddy, can you spare a dime?"
Demand heard from the fat-cats of 2008: "We want £50 billion from the tax-payers"
Chris, Essex, UK
mr darling needs to fund all uk companies seeking cash directly stop bailing out banks bail out the companies that are affected by there incompetance ie buy shares in these companies..... one example barratts was 12 pound now 95p a bargain for the uk tax payer if you allow home builders to fail then suppliers to the building trade will go under this will cost the loss of 10,s of thousands of jobs in the uk ..not worth thinking about
andy, surrat, thailand
when allbypu hsve is a hammer, everything looks like a nail
chris, usa, usa
Labour MP's back in parliament shouting down the conservatives who want to reduce government spending saying Labour needs to borrow even more than before and spend far more than it has been ! Can you believe these idiots, they really cannot stop putting us the taxpayer in more and more debt.
Russ, Aberdeen, Scotland
So the tax payer bails out the banks with a huge cash injection when the banks hit hard times, but when a tax payer hits hard times and hits their overdraft limit the bank punishes them with a large cash charge - The banks cant loose, the average person always does.
Paul, London,
£100 BN wouldn't have helped, because the problem isn't cash. The problem is that investors and banks don't know yet how government is going to regulate banks future business, which will impact their profitability and investment potential. Cash is fire-fighting; what's needed is leadership.
Mark Johnson, Nottingham, UK
"UK banks have followed the American banking business model"
At the very least from day one. In fact the question of whether the model was spawned in New York or in London is debatable. Either way, both governments saw it as the proverbial honey-pot and adopted it with open arms; lest we forget!
Richard Crow , Warsaw, Poland
Time to crack down on the Offshore Finance Centres that were used to set up many of the opaque securitisation structures that have contributed to this chaos.
Simon Willing, St Ouen,
Sonny, Geneva: Either you recall wrongly or you're being ironic. Our current PM a "very competent" chancellor of the exchequer? A devious, blundering, secretive, ham-fisted fool, more like. If - IF - he foresaw the consequences (or was advised about them), he chose to look the other way.
Neil, Galloway, Scotland
Why are the bankers as professionals in their field not being held accountable for their actions. If an engineer, for example, constructed bridges all over the World, which fell down they would be liable for their actions and sued under their professional indemnity insurance.
Jo Fisher , Hobart , Australia
Banks refused to invest in business only buy to lets....for years I have run a multithousand pound business off a personal current account and could not get a business account. Actually I do not need an account ...its cash only now folks...and only real businesses can do that...bye bye banks...
Stephen Moprris, london, uk
The people we should be bailing out are the savers at Icesave!! Why is there even a possibility of a stand-alone savings bank, sanctioned to run in the UK, repatriating its cash to bail out Iceland? Would Abbey savers be left high and dry if Santander took its cash back to Spain?
Paul Fons, London, UK
Wake up Brits-we're going communist.How ironic that it's the bankers,those pillars of capitalism who have brought it about.
Andrew, Bristol, UK
I cannot believe the proposed nationalisation. it has to be across the board or will fail due to the imbalance of competition due to a partial nationalisation.
My view is that the HBOS / LTSB deal is off and this is another hasty ill planned intervention .
robert fenton, Bham, uk
The UK has been left vulnerable as a result of the rape of our manufacturing sector and its deliberate fiscal starvation by the banks and city institutions over the last twenty years.
Dave, Chorley,
Your current Prime Minister used to be the Chancellor of the Exchecker (and a very competent one I recall) when all this wheelin' and dealin' was going on. Was he not aware of the very probable consequences?
Sonny, Geneva, Switzerland
Well the property market will be the biggest casualty of this credit crunch. All the fall out is from american sub prime mortgages at the moment, just wait for the UK sub prime (BTL MORT & Interest only) to kick in. UK banks have followed the American banking business model, Massive fraud= %60 crash
john, poole,
The NON-novices are now reacting to events! Brown and darling are back to looking sad and dejected; the writing is on the wall. Miliband has been uttering threats to the Iranians. Sad people in Whitehall/Westminster. The Nato hegemony is over - politically, economically and internationally!
John Edgar, Cupar, fife, Scotland
happy days are here again
that song was made in 1930,s depression
but when u get private equity make billions in less than a year and pay 10% tax.
when a chap kicks a ball and gets 200k a week
city boys get bonus of millions for gambling
come on what do we really expect.
mike mckeary, paisley, scotland
It seems to me we are in a 'bail-out inflation' situation. Each time something is thrown at the situation it sinks into the quicksand. Then something bigger is offered, but still to no avail, and so now we have £50bn of our money being offered as a sacrifice. Where will it end?
Don, Middlesex, UK
Maybe the taxpaying public has some responsibility for this mess. If you keep on feeding a dog it will continue to eat. As the banks kept feeding us with cheap credit we just couldn't help but gorge until we burst!
Chris, Bolton, England
"Pumping money into the markets will not change things: markets are over-priced and if there is a bailout a 1930s type slump is going to hit." (Steve Tea)
Can you plese convince the feds on the other side of the pond of this? The amount of money they have given the banks is obscene!
Todd, Hamden, Ct. , USA
I understand that a recapitalisation of RBS and Barclays may now be essential, but will be appalled if the CEOs do not as a result lose their jobs. Not all banks require support (HSBC is fine, as would Lloyds TSB be if it had not be 'encouraged' to rescue HBOS). Those two banks have been mismanaged.
Robert, London, UK
At least in America there is some sort of vote and the president does step forward to put the plan forward. Come out come out whereever you are Mr Brown.
rob, ashbourne, uk
Instead of inevitable increased compulsory taxation to pay for this mess. Why can the Government not issue bonds so that the taxpayer may actually benefit instead of just being robbed by the Government in the near future. Taxpayers not on the property ladder are being fleeced twice funding the rich.
Matt , Bournemouth, UK
Shouldn't the headline read "Downing Street in chaos after bank summit" The Labour party are out of their depth, look where Brown's prudence got us, it didn't exist. Look where Darling's stability got us a non-functioning banking system. Labour are only good for a tax and waste policy.
steve tea, manchester, cheshire
Mortgages of 125% and houses made of paper and wood in UK and USA meant this situation was inevitable.
Pumping money into the markets will not change things: markets are over-priced and if there is a bailout a 1930s type slump is going to hit.
The UK is very vulnerable. No coal mines...
Dave Smith, GENEVA, CH
Anyway ..
whats wrong Iceland.
Bought some very good food there only this morning ;-)
And got cash back..
Shaun, Gloucester,
Listening to the Fed Chairman, President Bush and Hank Paulson on Bloomberg it becomes obvious that the UK is devoid of any type of leadership. The US administration talk to their people daily, ours don't do anything or talk at all. Get brown, Darling and King out now before its too late.
Will, Lincoln, UK
In 5 years everyone will have forgotten about all this. Great time to buy property right now, you'll be laughing all the way to the bank in 10 years. so take your cash out of the bank and put it to work now, you won't regret it. This is the best buyers market we have seen since the 90's. Fantastic.
Matt, Leeds, UK
And meanwhile, in Barbados, the Fat Cats (who got out quick , and and are just waiting on the 'bottom' ) sit on the beach, sipping their long drinks. No talk from the various governments on taking the Big Bonuses from these parasites. No, as usual it will be The Poor who 'Bale Out The Rich' .
Hugh, Buckfastleigh, England
The banks will not need to be 'recapitalised' using taxpayers' money if those two fools Brown and Darling would only wake up and realise that what we need is a rock solid guarantee that ALL deposits in UK banks will be protected, as £50k is nowhere near high enough for corporate investors
Paul, Coventry,
For me, not enough attention is being payed to the
150b already pledged. If the liquidity isn't restored,
then its a guaranteed 30's style depression.
Mr Browns got in too big, too early with public money.
M Walker, Nr Bromsgrove, Worcs
which are the other banks with the "passport exemption"???
David J, London,
What's this?? "O" grrr grrrr! ..... a viscious circle
Sean, leeds, uk
Calm down. They may be "hit" as in affected, but they haven't lost anything. They can't have it immediately, but if they wanted surety of that they could have made withdrawals before.
Saving with a bank is an investment, after all, just like any other.
Don't bailout banks. Leave the market alone
Laura Roberts, London, UK
You cannot get money out of an ISA in 6 days, and thats what many of us have in Icesave.
Peter, Keighley, UK
This is a problem driven by the irresponsible policies of the USA, Europe and the developed nations.
Hiding inflation by doctoring CPI Indexes to exclude oil, gas and house prices and then inflating the economy further by 'printing' money & leveraging it into a housing boom is criminal..
SIMPLE!
mark, Birmingham, UK
We have a novice Prime Minister and a novice Chancellor. Bringing back the sultans of spin, Mandelson and Campbell means the Prime Minister is still more concerned with the Politics rather than the economics of the current crisis. The Goverment should be taking the lead not reacting.
John Wright, Witham, Essex
Why shoulkd anyone be bailed be bailed out? I save with a certain bank, perhaps because it offers better returns. I invest in stocks and shares for returns. Its a risk I take. People have to learn to take the rough with the smooth.
hamad Lone, London, England
A few jolts and everybody panics because nobody knows who owes who how much. Keep your seatbelt fastened for more turbulence, but for those with cash a good time to buy I would have thought.
Mart, London,
Is it too much to ask that the Brown mob become proactive instead of reactive. If you can't stop dithering, pass the job onto someone else. After all Labour allowed this indiscriminating borrowing in this first place. Labour 125% mortgage -Germany 60% mortgage.
A Walton, Leicester, England
The economy burns whilst McBroon and Darling play their violins!
Dither Dither Dither. Our Gord's vast experience must be in dithering. By the time Nu labour acts there will be nothing left to salvage.
Tim, Sherborne, England
Lost a high five figure sum in Icesave today. Not fun. I guess this is what happens when we have a bunch of incompetent fools running the World. We need strong leadership fast. Sooner New Labour become Past Labour the better. Good riddance.
Rich, Leeds,
This is getting very tiresome.
Savers are investors, just like anybody else. You give your money hoping for greater returns. You invest.
You should be monitoring firms constantly. This Icesave failure has been talked about for 6 days min You've had 6 days to get your money out.
Don't be lazy.
Tom Franklin, London, UK
Why is it that when I hear the name Alistair Darling I see a picture of Sarah Palin?
Kent, Bath, Somerset
Put a media block on all the finacial issues. Yes things arent great, however if you panic the public, then people start to move money around etc it causes too many problems and hence starts teh spiral.
B, Birmingham,
How are going to bailout the banks? Everyone says the Goverment ie taxpayers however politicians will be loath to raise taxes immediately which means more borrowing. However this is a gloabl liquidity and recapitalisation crisis and is there going to be enough money to recapitalise all the banks?
Rupert, London, UK
We are approaching this kind of meltdown soon here in the USA, thanks to other people, greedy bankers, realtors, government, et al. The average guy trying to save for the future is screwed. Now we all have to help pay for it,too! Layoffs everywhere, those working are getting their hours cut heavily
Scotty, Philadelphia, USA
This isn't a nation problem it's an international problem. Hopefully, people will start to understand that no country is exempt, from this crisis
Don Sargeant, Greenwich, Connecticut
Oi Darling, don't rush, take you take your time. What's wrong can't make a decision in isolation afraid of upsetting the EU?
steve tea, manchester, cheshire
Does any know how viable Halifax bank is with the current financial turmoil cos i might have to pull my savings out if the situation continues, the hope i have in teh uk banking system is fading gradually. seems we're back to the stone age were putting your money under the mattress is the norm
Daniel, Essex, UK
Close call. I almost opened an Icesave account several months ago.
Phill, The Wirral, England
Remember the government shutting BCCI IN 1991 and 4 other solvent banks and 15000 was the most one could get. At that time the country and the govenment were not that much concerned and you know why because the indegenious had no saving with this bank.
What a hypocrisy.what goes around comes around.
mcarthur, london, uk
With reports changing hourly, I cannot decide where to keep my overdraft.
Jim, Hurst Green,
Any one of you Landisbanki savers remember BCCI?
Nick, Seaford, UK
That was lucky, I moved nearly 100k out of that bank last week. I feel desperately sorry for the savers that got caught out though.
Mark, London, UK
There are more icesavers than Icelanders. I say we take the country over, and get our money back the old fashioned way.
Paul, London,
When was the last time Gordon Brown mentioned the strong economy and low interest rates that he so skilfully created? He can't blame this just on the Americans. When is he going to hold his hands up and admit he helped to create and did nothing to prevent this problem during his time as chancellor
Bruce Mcaaw, Grantham,
Brown together with Greenspan caused all these huge problems to the world economy by encouraging the dredit bubble. They have allowed this destruction by not controlling the economy with monetary intervention years ago. Now Brown has to secure all deposits to bring back confidence to the banks.
NICHOLAS Bsc Economics, LARNACA, CYPRUS
I hope the treasuary will bail my company out if we get problems.oh its different rules for different businesses.......
let them go bust, its part of the natural cycle, otherwise itll be costing us decades to come, they should not have been so bloody stupid in their practices in the first place.
Chris, rochdale, uk
Seems Brits are always being ripped off. Icesave savers in the Netherlands are still allowed to withdraw funds...
Richard Weed, The Hague, Netherlands
When are we going to require listed companies to publish financial data such as net debt as a percentage of earnings or net debt per share so that consumers and investors alike can make informed decisions about where they either deposit or invest with clarity.
Stephen O'Mara, Tamworth, Australia
The Icesave website is up and running at midday.
Ian, Basel, Switzerland
Can I have my money back please????
Paul, Leeds, UK
Just lost a £1000 with this lot - i'm withdrawing everything else in other banks and putting it under the mattress, guarding it with a shotgun. It's the way forward in these troubled times...
Armand Tamzarian, London,
I put in a CHAPS order last night to move all £25K from my Icesave account. This morning the CHAPS order was processed (£30 fee has gone) and my Icesave account is now showing £0. The money still hasn't arrived in my current account ... just hope I was out in time.
Simon, London, UK