Mervyn King, the Governor of the Bank of England, is reported to have told Britain’s five big banks that he is sympathetic to their appeals for financial help.
So far the Bank of England has thrown £11bn into the stricken UK money markets, in an attempt to stave off a recession caused by the banks’ enthusiasm for throwing all their funds away on obvious and spectacularly bad risks.
Now the banks would like changes in the rules so they can back up their emergency borrowings with a wider range of collateral, such as the worthless mortgages they lost all their money on in the first place.
Mr King has so far been reluctant to agree to the proposal. However, he was reportedly alarmed by Wednesday’s raid on Halifax Bank of Scotland - said to have been deliberately engineered by a group of rogue traders spreading false rumours - as the story could give people the completely wrong impression that the entire financial system upon which the Western world depends is utterly at the mercy of a gang of morally-bankrupt chancers who would gleefully sell their own daughters if they saw a quick few bob in it.
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