What did the British government do to bolster the banking sector?
The British government partially nationalized its financial institutions by offering to buy up to £50-billion in preference shares from at least eight of the country’s biggest banks and building societies. These include HBOS PLC, Barclays and Royal Bank of Scotland. The move by the Treasury would give taxpayers a stake in Britain’s major banks. Treasury chief Alistair Darling stressed Britain was not trying to take control of the banks or attempt to run them. But the government also warned it would not be hands off, saying it would look at the dividend policies and executive compensation schemes of the banks and also wanted a firm commitment to support lending to small business and home buyers.The government also promised to guarantee £250-billion of bank loans. British bank stocks surged on the announcement.
