Day of reckoning for the banks

12.02.33pm UTC (GMT +0000) Thu 9th Oct 2008

Lib Dems support the Government's rescue plan for banks.

Commenting on the £50bn bank rescue plan announced by the Government, Liberal Democrat Leader Nick Clegg said:

"This is a day of reckoning for the British economy. It is also a time when political parties must come together to support this package to prevent the downward spiral of the British economy. There will of course be a need to examine the detail, but today is a day to stand together.

"There can be no doubt that today marks a fundamental shift in the way we view banks and, in turn, the obligations banks have to the public must change for good. They must serve the public interest as well as their own commercial interests.

"With the support banks are now receiving, it is no longer justifiable to impose aggressive repossession policies on home-owners and insolvency policies on businesses. The short-term bonus-driven ethos must end today, starting with an end to all bonuses for bank board members whose role it is to ensure the stability of banks over the next decade, rather than maximising profit over the next few months.

"However, this is only one part of the jigsaw. We also need wider changes to help ordinary families: a cut in interest rates, tax cuts for those on low and middle incomes and a significant overhaul of the regulations governing the banking system.

"Finally, although we fully support the steps taken today by our own Government, it is clear that what is also needed is international agreement on a new regulatory framework. Unilateral efforts are unsustainable.

"Today we have seen a national response to a global crisis. Any long-term solution must be global too."