LONDON (AP) -- A bank rescue plan and interest rate cuts have sent British banking stocks soaring.
Prime Minister Gordon Brown called the 88 billion dollar plan for stabilizing banks "radical." It would partly nationalize at least eight of the country's largest banks, giving taxpayers a stake and, Brown says, earning a "proper return" for them. The prime minister adds "we expect to be rewarded for the support we provide."
In addition, the British government is promising to guarantee more than 400 billion dollars worth of bank loans and the Bank of England has made at least 350 billion dollars worth of short-term loans available to banks to help thaw frozen credit. The central bank also announced a surprise half-point cut in the base lending rate. That move was made in coordination with other central banks including the U.S. Federal Reserve.
All of that has banking stocks heading upward. Shares of the Royal Bank of Scotland climbed 27 percent and HBOS jumped 58 percent.
(Copyright 2008 by The Associated Press. All Rights Reserved.)