UK: Bank rescue plan fails
The desperate gamble to rescue the UK banking sector announced just a matter of weeks ago have failed. And, deviod of any other plan, The Brown - Darling team has decided to to play double or quits.
Well, not quite double but very nearly.
An additional GPB 100 milliard will be added to the GBP250 milliard announced at the end of October.
When the Brown-Darling Duo announced their grand plan in October, they were almost excitable. But this morning, they are holding what will be a downbeat press conference in Downing Street - before an off-the-record, off-camera briefing takes place in the HM Revenue and Customs offices in Parliament Street.
But already today, there has been a flurry of press releases. Again, the measures are "comprehensive" (as they were last time).
But at the heart of it is more nationalisation, more taxpayer's money and more guaranteeing.
Brown says that the facilities are fee-paying and at interest and that the taxpayer will get the benefit when the shares the government is now taking are sold.
But the markets don't think much of it: the pound was down against all both the Euro and the USD in early trade, having lost about 25% against the greenback in recent months - despite the USD's relative weakness against many other currencies.
There remains one big question that Brown says is too dire to contemplate - if it's costing two years' worth of UK GDP to save the UK banking sector, why bother? Oh, yes. Because, after letting the last of Britain's already dwindling manufacturing industry go UK PLC has nothing except invisibles to sustain itself.
The scheme also provides for GBP50 milliard to be made available to the Bank of England so that it can buy high-quality private sector assets - whatever they are.
Download PDF version of this page