Brown details '£37bn bank bailout'
Updated on 13 October 2008
Prime minister Gordon Brown confirms multibillion pound RBS, Lloyds TSB and HBOS cash injection and scalps of banking bosses.
Three banks - Royal Bank of Scotland, Halifax Bank of Scotland and Lloyds TSB - will be part-nationalised, with the bulk of the funding going to Royal Bank of Scotland.
Barclays has said it will raise £6.5bn capital independently.
Although the government will not be involved in the day-to-day running of the banks, chancellor Alistair Darling said there would be restrictions on the bonuses bank bosses could earn.
The boards of the three banks will not get cash bonuses in 2008, and in future years bonuses will be linked to long-term value creation, restricting the potential for "rewards for failure", the treasury said.
In exchange for the capital, the banks have agreed to maintain competitively-priced lending to homeowners and small business at 2007 levels. The government will also have some say over the appointment of new non-executive directors.
Four senior bankers are also losing their jobs. RBS chief executive Sir Fred Goodwin, who earlier this year asked shareholders for £12bn to help shore up the bank's finances, will stand down. The bank's chairman, Sir Tom McKillop, will step down next April.
Gordon Brown said the government would not be a permanent shareholder in the banks, but described the package as "essential for all of us".
"For savers, for small businesses, and for homeowners, we must in an uncertain and unstable world be the rock of stability on which the British people can depend," he said.
The move comes a week after the government announced a massive banking bailout plan which made £50bn public money available to recapitalise Britain's banks.
'Do you know exactly what you're buying into?'
Channel 4 News's Jon Snow questions Gordon Brown on the banking buy-up.
