Thursday, December 18, 2008

BoE's Bean says British banks will need more money

Charles Bean, Deputy Governor at the Bank of England, said that on top of the £37bn the Government has already invested in three of the UK's largest banks, "it may well turn out that further capital injections are required."

He explained in an interview with the Financial Times that banks were still refusing to lend to households and businesses, despite the recapitalisation programme and other measures instigated both by the Bank of England and the Government.

"I think it is quite likely that some further action may be required to bolster bank lending," he said, warning that if businesses did not get access to credit there would be further job losses, with companies "putting investment plans on hold, [and] shutting down factories".

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