Following on from the Bank of England's plan to stave off the credit crisis Britain's finance minister is to meet lenders today to urge them to do their bit and pass on interest rate cuts. Yesterday the Bank of England, the UK's central bank, announced banks will be able to swap potentially risky mortgage debts for secure government bonds.
British finance Minister Alistair Darling said: "What we're trying to do is to ensure that we can help return something approaching normality to the financial markets. We can't let a situation continue where banks won't lend to each other, where that's constraining their ability to lend to businesses, to individuals, and providing mortgages."
Analyst Sam Stovall said there had been similar moves in the US: "I think the Bank of England's move is similar to what the US Federal Reserve did a couple of months back. Basically it is a world wide effort to make sure that the credit crunch does not get out of control and that there is appropriate liquidity world wide for banks to make loans if they want to do so."
After the US Britain is the country worst affected by the credit crunch. Experts remain sceptical about whether the Bank of England's plan can prompt an economic rebound.
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