Monday, October 13, 2008

U.K. to inject $63 billion into British banks

The British government is making a major cash infusion into three of the nation’s largest banks that will leave the British taxpayers as their largest shareholders. The British government is spending about 37 billion Pounds ($63 billion) in a bid to sshore up the ailing British banking system from collapse amid the global financial crisis.

The British government is requiring the banks being helped to lend more money to small- and medium-sized businesses and homeowners in addition to banning bonuses for board members. British Treasury chief Alistair Darling, speaking with Brown Monday, said it would be "nonsense” for board members to be taking their bonuses. The British government is also insisting that the bulk of future bonuses be paid in shares to ensure that bonuses encourage management to take a more long-term approach to profit making.

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