8 banks sign up to plan, which offers up to $87.5 billion in preference shares
LONDON - The British government announced plans on Wednesday to partially nationalize major banks, with taxpayers taking a share stake in a bid to restore stability.
The Treasury made the announcement a half hour before markets opened, saying eight banks signed up for the so-called recapitalization plan, which offers up to 50 billion pounds ($87.5 billion) in the form of preference shares.
The Treasury said the banks are Abbey National PLC, Barclays PLC, HBOS PLC, HSBC Bank PLC, Lloyds TSB Bank PLC, Nationwide Building Society, Royal Bank of Scotland and Standard Chartered Bank.
'It is stabilizing the system'
Treasury chief Alistair Darling said the government was responding to extraordinary times.
"It is a process that inevitably will take time. It is not an instant change but it is a restructuring, it is stabilizing the system, and that is very important," Darling told Sky News.
The Treasury said the Bank of England would expand its Special Liquidity Scheme to facilitate short-term borrowing and help to free up credit markets.
At least 200 billion pounds ($350 billion) will be loaned for up to three months, and it will also offer U.S. dollar loans for one week.
News of the government's plans leaked out Tuesday morning, triggering a sharp sell-off in bank shares.