The Government’s decision to inject new capital into a number of major British banks is a bold and necessary step. By the end of last week, it had become clear that the global financial system faced systemic risks of a very serious nature. Here in the UK, it is fair to say that the collapse of the wholesale money markets had pushed some of our biggest banks dangerously close to the edge of a precipice.
Failure to act decisively to prevent a total breakdown in the credit markets would have had adverse consequences for the whole economy and for our society in general. In the face of these threats, the UK took a leadership role and other countries are now following.
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