This is a quote from the book "Chancellor Alistair Darling on brink of second bailout for banks" by The Times
...essive action this week by cutting the base rate from its current level of 2 per cent. Doing so would reduce the cost of borrowing but have little effect on the availability of loans.

Whitehall sources said that ministers planned to “keep the banks on the boil” but accepted that they need more help to restore lending levels. Formally, the Treasury plans to focus on state-backed gurantees to encourage private finance, but a number of interventions are on the table, including further injections of taxpayers’ cash.

Under one option, a “bad bank” would be created to dispose of bad debt...

read full book block explorer