Britain Plans Bank Bailout Worth Hundreds of Billions

As European leaders continued to clash over measures to ease the financial crisis, Britain announced a three-part multibillion-dollar bailout for its beleaguered banks, and Spain moved to mount a separate rescue of its own banking sector, The New York Times’s Landon Thomas Jr. and Carter Dougherty reported.

At a news conference, Prime Minister Gordon Brown, pictured above, insisted that the crisis had begun in the United States. “This problem started in America with irresponsible actions and lending by some institutions,” he said. “In some cases nobody actually knew what irresponsible lending was done.”

As a result of the crisis, he said, “the global financial market has ceased to function.”

He depicted the British measures as far more radical than had been forecast and farther reaching than America’s $700 billion bailout.

“We have led the world today with a proposal to restructure our banking system,” Mr. Brown said. “We are taking the steps that I believe other countries will take in the future.”

In a theme that ran through the meeting, European ministers promised to avoid a bankruptcy like that of Lehman Brothers, which elevated the crisis on Sept. 15. “We’re not going to tolerate a Lehman Brothers scenario,” said Christine Lagarde, France’s finance minister.

The idea behind the British plan is to increase the underlying capital the banks rely upon as a cushion against losses, which most analysts and investors say is no longer sufficient given the combination of a recession-bound economy and the drying up of most forms of short-term liquidity.

for the full article http://dealbook.blogs.nytimes.com/2008/10/08/britain-announces-bank-bailout-worth-hundreds-of-billions/

Do you think that America is to blame for the finacial crisis happening in the world? Why or Why not? Do you think this plan will work? Are there any similarities between America and Britian on how to resolve this economic crisis?