Taxpayers to take stakes in banks
Updated on 07 October 2008
Channel 4 News has learnt that the government is set to spend billions of pounds of taxpayers' money on a stake in almost every UK high street bank.
Gordon Brown and Alistair Darling have held emergency talks with the Bank of England governor Mervyn King and the Financial Service Authority's Lord Adair Turner.
The pressure to agree a deal follows yet another day of sharp falls in banking shares and it's been the banks that have pushed the chancellor into coming up with a plan sooner, rather than later.
At the close of trading, shares in the Royal Bank of Scotland were down 39 per cent, wiping £10bn off the value of the bank.
HBOS saw its stock fall by 42 per cent amid new fears about the proposed Lloyds TSB rescue deal and Lloyds TSB shares were down by 13 per cent, as were Barclays by 9 per cent.
Only HSBC ended the day up, by 2 per cent.
The rescue plan analysed
So a bailout of the high street banks looks imminent.
The government is anxious above all to restore confidence and avoid a run on the banks but it is equally anxious to safeguard some returns for taxpayers in exchange. Faisal Islam reports.
