Monday, October 13, 2008

Brown bails out three UK banks

Markets have seen some recovery following an announcement by the British prime minister to pump billions of pounds into Britain’s banks. Lloyds TSB, RBS and HBOS will be injected with £37 billion of taxpayers money. The cash injection will give the government a say in how the banks are run including the issuing of bonuses to top management bosses [BBC]. Speaking on Channel Four News, Yvette Cooper, Chief Secretary to the Treasury, said the “extraordinary measures” were needed because Britain was facing “extraordinary times”.

The FTSE gained around 8% on the day’s trading while the Dow Jones also saw significant gains [Sky News]. However it was not all good news. Shares in the three major banks lost value following the bail out announcement [BBC].

Germany, France and Spain also made similar moves adding to the confidence on trading floors around the world [BBC]. Meanwhile the Icelandic stock exchange remained shut on Monday while talks between authorities in the UK and Iceland continue [BBC].

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