UK Buys Up Bank Shares in Radical Bailout

Cost of drastic rescue package could top $800B

By Rob Quinn, Newser Staff

Posted Oct 8, 2008 4:29 AM CDT

(Newser) – The British government will become part owner of the nation's biggest banks with a mammoth $88-billion rescue package for the troubled institutions, the Wall Street Journal reports. Under the plan, swiftly assembled after UK bank stocks plummeted in trading yesterday, the government will purchase non-voting shares in eight of the largest banks as a way to provide extra capital to the institutions.

The UK deal aims to boost capital so banks can restart lending. A further $360 billion will be made available for short-term borrowing to restore liquidity. A company will also be established to provide up to $360 billion in loan guarantees. The plan marks the start of "a process of un-bunging a big problem where banks won't lend to each other for long periods," said Finance Minister Alistair Darling.

A man walks past a sign in the window of a branch of The Royal Bank of Scotland in London yesterday. (AP Photo/Kirsty Wigglesworth)

Lloyds Bank TSB Group PLC in London. (AP Photo/Matt Dunham)

Britain's Chancellor of the Exchequer Alistair Darling arrives at Millbank studios, in Westminster, London, early today. (AP Photo / Lewis Whyld, PA)

London buses pass the front of The Bank of England in London yesterday. (AP Photo/Kirsty Wigglesworth)

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UK Buys Up Bank Shares in Radical Bailout

Cost of drastic rescue package could top $800B

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Nationalization Looms for Royal Bank of Scotland

Lack of faith in government's bank bailout plans sparks investor stampede

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Banks hike mortgage payments despite interest rate cuts

Branson's Next Launch: Virgin Internet Bank

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Bank Lending Still Down 23% 4 Months After Bailout

Journal says Treasury's tally hides damage

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UK Buys Up Bank Shares in Radical Bailout

Cost of drastic rescue package could top $800B

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OTHER STORIES ON OUR RADAR

United Kingdom • Barclays • Gordon Brown • bank • credit crisis • Britain • Alistair Darling • bailout • financial crisis

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Nationalization Looms for Royal Bank of Scotland

Lack of faith in government's bank bailout plans sparks investor stampede

UK Banks 'Milk Borrowers' to Pay for Credit Crunch

Banks hike mortgage payments despite interest rate cuts

Branson's Next Launch: Virgin Internet Bank

Exploiting the public's discontent with banks, Virgin could bid for Northern Rock

Bank Lending Still Down 23% 4 Months After Bailout

Journal says Treasury's tally hides damage

Some Banks Want to Bail on Bailout

Critics charge growing list of conditions will damage industry

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Newser By Users

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