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In the early hours of this morning (08.10.08), the government and the financial authorities have finally agreed an ambitious plan to save the banks. They present the £50bn bail-out as decisive action to stop the rot. In fact their hands were forced, and there’s no sign that it will stem the panic on UK stock markets in any case.

Last Tuesday shares in two of our biggest banks, HBOS and RBS, plummeted by 40%. Let Nils Pratley (Guardian 08.10.08) chronicle the damage. “At the close of trading, Royal Bank of Scotland, a bank that raised £12bn of fresh capital from its shareholders in June, was worth only £18bn.” (That is what the sum total of its shares came to.)  “Shares in HBOS were priced 50% below the value of a bid from Lloyds TSB to buy it.” The banking system faced catastrophe.