Fresh Bail Out for UK banks
Billions of additional public money will be used in a second bail out of the UK financial industry. The figure given by the Chancellor is ‘hundreds of billions’ this comes after billions (£37 to be exact) were invested into the industry to prevent the collapse of HBOS, where this cash will come from is unclear-will it be added to the national debt or some other method of raising money used.
Senior government have stated that the economy is now in a worse situation than previously with an expected 2 or 3% reduction in growth for 2009 rather than the 1% previously predicted. Below are a few key points on how this money will be made available:
For a fee the government will offer security on certain loans, the lender will pay a fee and pay part of the loss.
The CGS or credit guarantee scheme will run untill the end of 2009.
Assistance for Northern Rock
Discount Window Facility from the Bak Of England
Asset purchase facility from the Bank Of England
The Royal Bank Of Scotland has announced record losses of £28 billion.