It’s the talk of the town today, how the £37 billion already given to banks by the government from taxpayers money was apparently not enough.
The government has stated that it appears not all the banks were honest about how bad the debts and mortgages on their books were and now the taxpayers will need to bail them out yet again with billions of pounds more to an extent that they cannot yet quantify.
There will be a condition on this latest bailout that means the banks will be told that they have to start lending again, as there are fears that even successful companies have been turned down for credit at a time when they really need it. If the banks aren’t lending then there is a fear that this recession could become even worse.
Alistair Darling said:
“It’s quite clear in the world we’re living in just now we do need to look again at the way we supervise and regulate these banks. We’re doing it, because if the banking system collapsed, every single one of us, the economy would come down with it. I don’t think anyone would argue you ought to let that happen.”
Northern Rock has said that it will stop trying so hard to reduce its mortgage book and so will be paying the government back at a slower rate so more Northern Rock customers will be able to continue their mortgages with the bank.
The Royal Bank of Scotland is likely to need more government cash, bringing their share from 58 per cent to 70 per cent, which effectively nationalises the bank.