British lenders to get $87b in govt funding

Britain's banks will get an unprecedented 50 billion pound ($87 billion) government lifeline and emergency loans from the central bank after the freeze in credit markets threatened to bring down the financial system.

The government will offer to buy preference shares from Royal Bank of Scotland Group Plc, Barclays Plc and at least six other banks, and provide about 250 billion pounds of loan guarantees to refinance debt, the Treasury said in a statement yesterday. The Bank of England will make at least 200 billion pounds available. The plan does not specify how much each bank will get.

The emergency action failed to stem the stock market rout, with the United Kingdom's benchmark FTSE 100 Index falling as much as 7.8 percent. British Prime Minister Gordon Brown is following US President George W. Bush, who approved a plan to spend $700 billion last week to prop up financial institutions with untested measures as equities plunged around the world.