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Government to provide support to banking industry

Government to provide support to banking industry

Category: Loans

Updated: 31/10/2008
First Published: 10/10/2008

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The government has announced a financial package to support the UK's banks.

In a move that could help those seeking unsecured loans, eight of the main financial institutions will have £25 billion made available to them in exchange for the government receiving preference shares.

And according to the Treasury, the plan will "ensure the stability of the financial system" as well as protect "ordinary savers, depositors, businessmen and borrowers".

It is hoped that greater liquidity will come as a result, while the extra funding will give banks greater confidence to lend to others, making more finance available for consumers.

The support package has been widely welcomed, with Nationwide Building Society chief executive Graham Beale stating: "Clearly, in view of unprecedented market developments, radical action was needed."

He added that the move would provide reassurance to savers and borrowers, a view that was echoed by HSBC.

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