Newspaper article The Evening Standard (London, England)

Darling Rushes to Finalise Deal as Banks Accuse Him of Dithering

Newspaper article The Evening Standard (London, England)

Darling Rushes to Finalise Deal as Banks Accuse Him of Dithering

Article excerpt


ALISTAIR DARLING is tonight finalising details of a multi-billion-pound bank rescue.

The Chancellor was speeding up a major injection of capital after panicky protests from bankers who accused the Government of dithering.

He raced back from a summit of finance ministers in Luxembourg this afternoon where he is understood to have won EU backing to seize a stake in high street banks in return for taxpayers' money.

Mr Darling had a private meeting with banking chiefs and Bank of England Governor Mervyn King last night.

Dramatically speeding up the announcement, he called in Mr King and the head of the Financial Services Authority this afternoon for talks in Downing Street.

The three were then going to brief the Prime Minister on the details of the plan.

The Treasury was spurred on by another roller-coaster day for shares. Billions of pounds were wiped from the value of Britain's biggest banks when their shares collapsed shortly after the start of trading on another day of high drama in the City.

The hammering was triggered by leaked reports that three chief executives of Britain's biggest banks had talked to the Chancellor about a recapitalisation package.

One senior banking source said of the discussion: "They made it pretty clear to him that the dickering has got to stop. They accused him of treating it all as a political problem when in fact it is a financial one."

At one stage shares in Royal Bank of Scotland were down by more than 40 per cent in frenzied trading, although they eventually settled at around 25 per cent lower.

The latest gyrations came after yesterday's record one-day fall in the FTSE-100. At lunchtime today the index of leading companies was up 57.9 points at 4647.1.

The reports on the rescue plan meeting were carried on the BBC Today programme and in a blog written by its influential business editor Robert Peston.

The leak infuriated the bank bosses and was said to have left stock market traders "incandescent with rage. …

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