Three of the UK’s bailed-out banks are to lend billions of pounds extra this year to businesses and ordinary investors in order to boost the economy, the Prime Minister said yesterday.
Gordon Brown said the Government had signed lending agreements with the Royal Bank of Scotland, Lloyds TSB and Northern Rock.
It means that all three will undertake to pump an extra £40?billion a year this year and next year into the economy.
The Royal Bank of Scotland has pledged to invest an extra £25?billion, Lloyds TSB £14?billion and Northern Rock £5?billion.
Addressing business leaders at haulier Eddie Stobart’s headquarters in Carlisle, Mr Brown said it was vital the banks started lending money again.
“As you know we are in the biggest global financial crisis that the world has seen in our times,” he told the audience.
“The banks froze up for a period of time, it was almost like a power cut right throughout the system.
“It started in America and spread throughout the banking system.”
Mr Brown said he was hopeful other banks – not just those bailed out by the Government – would sign up to the scheme.
“I believe £70?billion will be made available with the banks. This is our way of trying to get them lending again,” he said.
“This will not solve the problems overnight but by helping the banks we can help them lend into the economy and in particular help businesses.”