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PM prepared to plough billions for into financial sector

January 31, 2009 by admin  
Filed under News, News-Banking

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Earlier this month the Prime Minister, Gordon Brown, and the Chancellor of the Exchequer, , indicated that they were prepared to plough billions of pounds more into the financial sector through the use of taxpayer’s money in order to try and get things moving again.

Officials have stated that this indicates that the £37 billion that has already been ploughed into the financial sector from the public purse has failed to achieve its goal.

The Prime Minister and the chancellor indicated that whilst they were not looking at another huge cash injection as a primary option they were not prepared to rule out the prospect that more cash may need to be ploughed into the sector.

Another option that the government has been looking at is taking on the risk of some debt as part of a type of insurance scheme. This would operate by banks paying a fee to reduce the risks faced by lending to both businesses and individuals.

Gordon Brown added that the main aim of the bailout scheme from last year had been to try and save banks from collapsing.

He said: ‘I don’t think you can judge the success of recapitalisation by what happened in one month. I think you’ve got to judge it as a necessary means in which by saving the banks – and saving is the right word – we restore the ability for them to fund businesses and mortgages, and that will happen over the next period of time.’

George Osborne, the Shadow Chancellor, stated: ‘If the Government has to revisit bank recapitalisation then it will be a stunning admission that their whole approach to the recession isn’t working. Gordon Brown’s recession policies are becoming an expensive failure.’

Tags: Shadow Chancellor of the Exchequer, Prime Minister and the chancellor, part, month, Alistair Darling, purse, government financial help, gordon brown

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