Feeds

Darling launches £50bn relube of bunged-up UK banks

Union slams 'disgraceful behaviour' of bank bosses

High performance access to file storage

The UK government has announced a dramatic £50bn part-nationalisation plan for the country’s struggling banking system.

Eight of Blighty’s biggest banks and building societies will be handed the extra capital. Some had earlier urged UK.gov to put together a rescue package after taking a hammering in the City.

The government will receive preference shares in Abbey, Barclays, Halifax Bank of Scotland (HBOS), HSBC*, Lloyds TSB, Nationwide Building Society, Royal Bank of Scotland and Standard Chartered.

Taxpayers’ money will be used to buttress the banking system, following weeks of tumbling share prices in the sector amidst a deepening credit freeze.

A further £200bn will be injected into the banking system by the Bank of England, as part of the rescue package, for short-term borrowing to provide liquidity to lenders.

In addition, a special company will be set up to provide £250bn in loan guarantees to banks and building societies.

"This is beginning a process of un-bunging a big problem where banks won't lend to each other for long periods," said Chancellor Alistair Darling, who will be making a statement to Parliament later today.

Other lenders will also be able to apply for inclusion in the plan, said the Treasury.

"The government's announcement represents a very real and serious intention on the part of the authorities, following consultation with the banking industry, to bring stability and certainty to the UK banking system," said the UK’s largest mortgage lender, HBOS. Last month it was thrown a £12.2bn lifeline from Lloyds TSB.

Meanwhile, Unite - the country’s largest union - today slammed bank bosses for their “disgraceful behaviour, which has brought a highly profitable industry to the brink of collapse”.

Unite said it will develop a charter to fight for jobs in finance, it will hold an emergency meeting today about the current financial crisis.

“Following the takeover of HBOS by Lloyds TSB and the part nationalisation of Bradford and Bingley, the union is warning employers that they will not accept compulsory redundancies in the banking industry,” it said.

The union wants its 180,000 members who work in the financial services market to lobby for a major overhaul of the banking system, and it will be calling for “tougher regulatory requirements”. It also wants the government to halt outsourcing of finance work.

Just last week reports suggested that HBOS could be considering moving as many as 2,000 back office and IT jobs to India as part of its cost-cutting plans.

"There are hundreds of thousands of staff working for the financial services in branches, call centres and back offices right across the country. They are not the culprits of the credit crunch and we are not prepared to allow them to become the victims,” said Unite deputy general secretary Graham Goddard. ®

*HSBC put out a statement this morning in which it distanced itself from the government's part-nationalisation plans.

"Consistent with the objectives of the UK scheme announced today, HSBC will ensure that our principal UK subsidiary, HSBC Bank plc, continues to be appropriately capitalised, funded from the group’s internal resources," it said.

"HSBC therefore has no current plans to utilise the UK recapitalisation initiative."

High performance access to file storage

More from The Register

next story
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.