Brits Work a Deal to Boost Confidence in Their Banks

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Officials in Britain have seen what's going on with the rest of the Eurozone, and have cut a deal worth an estimated £80 billion to make sure they don't become the next Spain.

The Guardian reports a deal was made between the Bank of England and Britain's Treasury as a preemptive move to protect the English economy from any havoc currently threatening Eurozone countries. The deal will have British banks, "receive cut-price funds provided they pass on the benefits to their business customers." The Guardian explains:


This new "funding for lending" scheme could provide an £80bn boost to loans to the private sector within weeks and alleviate growing fears of a second slump since the start of the financial crisis in 2007.

In a second scheme the Bank will begin pumping a minimum of £5bn a month within the next few days into City institutions to improve their liquidity.

The idea is that the money will be put immediately back into the British economy and raise confidence in their financial system. "We are not powerless in the face of the eurozone debt storm," said Chancellor of the Exchequer George Osborne. "Together we can deploy new firepower to defend our economy from the crisis on our doorstep. The government, with the help of the Bank of England, will not stand on the sidelines and do nothing as the storm gathers."

This article is from the archive of our partner The Wire.