The Bank of England has announced a £50 billion plan to help prevent the ongoing credit crisis that has seemingly gone world-wide since the problems became evident in the USA.
£50 billion is $99.82 billion in US Dollars. That is a lot of money and shows that the underlying fundamentals of the world markets are, unlike what the Bush administration tells us, becoming more and more shakey by the day.
From BBC:
Banks will be able to swap potentially risky mortgage debts for secure government bonds to enable them to operate during the credit squeeze.
The Bank’s governor, Mervyn King, said the scheme aimed to improve liquidity in the banking system.
It should also increase confidence in financial markets, he added.
Under the scheme, banks will be allowed to swap their “high quality” mortgage debts for government securities.
The British Government is allowing banks to exchange mortgage debt for Government backed bonds. Sounds like another bail-out at tax payers expense, wouldn’t you say? Only, once again, the tax-payers aren’t the ones getting bailed out.