UK Government Will Partially Nationalize Banks, Sue Iceland

By: Associated Press Email
By: Associated Press Email

London (AP) British Prime Minister Gordon brown says it's not a time for conventional thinking and that's why the government will partly nationalize major banks.

The plan is a bid to shore up a financial sector that many investors fear can't survive the global turmoil without government help.

Britain's treasury said it would invest up to 87.5 billion dollars in exchange for preference shares in eight of the county's largest banks and building societies.

Treasury Chief Alistair Darling says the government is responding to exceptional circumstances and “absolutely not” seeking to take control of the banks.

Darling also announced that the government would guarantee British savers' accounts in Icesave. That's the internet operation of a bank in Iceland which was nationalized yesterday. Icesave has suspended operations.

Brown says the government will sue to recover deposits.

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