Salar posted on October 08, 2008 08:08
Last night The chief executives of Royal Bank of Scotland, Barclays, Lloyds TSB and HBOS last night met the chancellor, Alistair Darling, and other senior members of the Tripartite Authorities.
The banks are understood to have told Mr Darling that they broadly back a plan for the Government to take equity stakes in return for capital injections. Analysts yesterday predicted the Government might need to pump between £30bn and £50bn into the banks.
The lack of action today caused bank share crashing. BBC reported that the Government will include a proposal to use taxpayers' money to invest in banks - in effect part nationalising them.
The dramatic initiative is aimed at stabilising the financial system and making sure banks have enough cash.
The news comes after a day of steep falls in UK banking stocks and a high-level Downing Street summit Chancellor Alistair Darling said he would make a statement before financial markets opened on Wednesday morning and address the House of Commons later in the day.
Prime Minister Gordon Brown earlier held talks with Bank of England Governor Mervyn King. Mr Darling and the chairman of the Financial Services Authority, Lord Turner, also took part in the discussions.
The announcement comes amid a series of dramatic developments in the world financial system:
Gordon Brown will announce full plans tomorrow to use up to £50bn of taxpayers' money to take major stakes in the high street banks in a last-ditch attempt to restore confidence in the financial system.