5 Jan 2009

No new bank bail-out on the cards - British PM

4:14 pm on 5 January 2009

British Prime Minister Gordon Brown says he has ruled out another bail-out of banks soon.

The British government set aside up to 37 billion pounds in October to boost the capital of three major banks that were hit by the credit crunch.

Both the BBC and The Times reported on Saturday that the government was considering a second bail-out because measures taken so far had failed to get the banks lending again.

However, when asked in a BBC television interview on Sunday if the government planned a second recapitalisation of the banks, Mr Brown said there were "other means ... to get liquidity and cash into the system".

He also noted that several new schemes to help businesses had just taken effect.

Finance minister Alistair Darling also told the BBC that recapitalisation was not the "first port of call".

Asked whether zero interest rates were possible in Britain, Mr Brown said that was a matter for the Bank of England Governor.

The Bank of England lowered interest rates by a full percentage point to 2% on 4 December. A further cut is expected this week.