October 12th, 2008

The British government (according to the London Times) has increased the funding for bank recapitalisation by another £25 billion. The Bank of England has raised the core capital ratio for banks from 6% to 9%. The London stock exchange may stay closed until the bank recapitalisations are done deals. Several bank CEOs are expected to go.

After their expensive dithering over Northern Rock, the British financial authorities are now showing Nelsonian dash and ruthlessness.

Memo from Nelson to Secretary Paulson and EU finance ministers co-signed by the Thane of Cawdor, John Paul Jones, the Vicomte de Turenne, J.P. Morgan, and General George Patton:

If it were done when ’tis done, then t’were well

It were done quickly.

Update - Sunday 2330h CET

The other EU countries now have committed themselves to large-scale bailout packages on the British model: equity capital (i.e. partial nationalisation), and guarantees for interbank loans. There’s not to be a European fund so pressures will mount on the weakest national banking systems. The laggards at the semi-failed Friday G7 meeting must have been the USA or Japan.

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