Government announces details of bank recapitalisation plan

13/10/2008

Around £37 billion of stock in major high street banks is to be bought by the government.

RBS, which owns NatWest, is to get £20 billion, while Lloyds TSB and HBOS will get £17 billion between them.

This infusion of money will, the government hopes, make people more confident about banks' financial stability.

Sharp falls on the stock market were registered every day last week, with the FTSE 100 index falling 21 per cent between Monday and Friday.

Bank shares in particular were battered in the downturn.

However, with government money now providing a strong back-up in the tough times, ministers hope that this will change.

"The government is today taking decisive action to ensure our banking system remains on a sure footing in the face of continuing and exceptional instability across the world's financial markets," the treasury said in a statement.

"These actions will also help to build confidence and security in our banking system and provide greater protection for consumers."

Tags; Current UK Economy, Young Family Finances, Retirement Money Problems, Credit Card Lifestyle, Recent Graduate Debt,

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