Darling: My reasons for providing cash
IN the last seven days I've taken extraordinary steps to strengthen the British banking system. I'd little choice-sitting on my hands wasn't an option.
And my view is shared by finance ministers around the world. That's why they agreed to call for 'urgent and exceptional' action on a global scale when I met them in Washington.
The action we agreed will have far-reaching implications for banks and other financial institutions in all countries. Such is the scale of the turmoil only governments can deal with it and only by acting in a co-ordinated way.
Gordon Brown is presenting our plans to European colleagues tomorrow. There is widespread recognition the British plan, calling for action on capital, liquidity and regulation on banking practices, is the right way forward.
As the credit crunch has tightened its grip on the world, banks have simply stopped lending to each other. The system has seized up. We needed to oil the wheels to get it going again.
The Bank of England has injected extra money into the markets to help free them up. We are buying shares in UK banks and building societies to make them stronger and offering them a temporary guarantee to help restore confidence.
People ask why we've stepped in while other companies are allowed to fail. The banking system is at the heart of everything we do. If the banks stopped lending to people and to business it would mean lower growth, lower living standards and fewer jobs right across the country.
That is why I'm determined to use every lever I have to do what I can to protect families, pensioners and businesses.
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This article has 8 comments
TOO LITTLE TOO LATE, DITHERER.
By EUDOXIA. Posted October 12 2008 at 6:05 PM.
I cannot believe that so many people are so gullible in thinking that Brown and Darling are doing a good. Brown in particular is culpable of the worst performance as Chancellor and then as PM over the last 11 years. He has encouraged a culture of debt and destroyed pensions and discouraged savings. The Goverment has a responsibility to protect the public and regulate our lives where necessary. There may be crazy and greedy bankers out there but the Government must have known this and should have regulated their activities. This would not have happenned in they way it has if they had done their jobs. Whilst there are some global issues involved we should have been in a much better picture to withstand the storm. Instead the govermnent has been overspending in all the good years and left the cupboard bare. Dont be fooled by Brown and Co. If the so called rescue mission doesn't work the consequences are unthinkable.
By William. Posted October 12 2008 at 4:29 PM.
Gordon Brown is not at fault for everybodies irresponsible borrowing and lending.
By Liz. Posted October 12 2008 at 2:52 PM.
I blame both Brown's 'Age of Irresponsibility' and the MPC's 'Nice Decade' of artificially low interest rates for this very unnecessary crisis. They quite simply failed to learn from history and the last boom/bust wasn't that long ago either...
By cww. Posted October 12 2008 at 12:25 PM.
So what happened to banking supervision? The Government have been asleep for years as the problem grew and grew without doing anything. Gordon Brown talked and talked about no more boom and bust - look at this mess. New Labour are incompetent and should resign so we can have an effective Government.
By Simon Galton. Posted October 12 2008 at 1:27 PM.
Who was supposed to be regulating the banks since 1997?Brown personally set up the Financial Services Authority and the rules of banking.The "IRREPONSIBILITY" which caused the mess lies with Brown himself.He is now spinning the blame game to involve everyone but Labour.
By Dr Michael John Parkinson. Posted October 12 2008 at 10:47 AM.
Whats the betting when this lot are kicked out Brown and Darling get jobs in the City on Fat Cat salaries.
Why is no mud sticking to Blair as he was in charge and bailed at that right time, the only person benfiting from his term in office being Blair
!!!!
The country is living beyond its means and has an army of people"working" on nonsennse schemes which are chasing the face of Britain and making us a laughing stock.
By Mark. Posted October 12 2008 at 7:44 AM.
I was watching a US TV news station the other day (don't watch the Pravda like BBC any more) and they were saying that no government has ever got all its money back, let alone made a profit from this sort of bailout. Do you reckon you can buck the trend? They were also asking the question of what the banks do and it doesn't amount to much, in fact the conclusion was that new internet based solutions are already emerging so why prop up an ailing, outdated industry that has failed spectacularly when we don't even need it any more.
All we've ever had from the financial services industry is one rip off after another, why use so much of our money to bail it out?
By Simon. Posted October 12 2008 at 5:16 AM.