So senior bank staff and shareholders have taken huge profits from banks for years, and now that it's all gone wrong, our tax money has to put it right?

Wouldn't it be nice if we the little people could have similar get out of jail free cards for our own businesses!

Alex, London,

I feel sick. If unemployment starts rising sharply then we'll have a total economic meltdown. A Government that inherited one of the strongest economies in the world will have bankrupted itself within 10 years. When did that last happen? 1967 and 1976, both under Labour. Darling isn't even a banker, he's a lawyer.

George Thomas, London,

The banks fueled the boom and raked in the profits, now the bust is here they dont have to pay, we do.

Paul, Andover,

On the bright side, this should enable banks to continue paying outrageous bonuses to the fat cats. At least we know that the proceeds from discontinuing the 10p basic tax rate will not be wasted.

Trevor, Southend, UK

A liquidity crunch should be averted. Short term loans and Cash is the life blood of a market economy Thus BoE's actions are justified.

The govt should ensure banks pass rate cuts to people on trackers and to a lesser extent to people on variable rate mortgages.

But why does Brown & Darling want to ensure better mortgage deals all over? Deals should become better because of competition amongst lenders & not because the govt decrees it.

The lesson here is good times don't last & loans which cannot be repaid when times turn sours shouldnt be taken.

It's wrong to give sweetened deals to FTBs in the current market. If the house prices are at an all time high, if repayment capacity is low due to high costs, then FTB's should stay off the market, until market condition & their own affordability increases.

Whatever noises the govt is making is politicking and has not economic basis whasoever.

Brown and Darling are trying to salvage their political future at the cost of the economy.

Treveor, London, UK

It would be better to let the house prices to drop and correct themselves. Now the Government is using tax payers money in a desperate effort to boost the pyramid investment scheme, also known as the nuy-to-let, over the next elections. The problems result from too easy credit that has been going on for too long and now the banks are encouraged to continue that by promising that the tax payer carries the risks!

JP Melville, Southampton,

It warms my heart to see that the majority see right through this massive theft. For the hard of thinking, here are some 'highlights' -

The banks have lost all our money pricing half of us out of houses by lending to anyone who can fog a mirror. Now the government intends to bail the banks out with more of our future money, so we can continue to be priced out of our own country.

If there's anything left in the government coffers, they'll probably spend it on a war more than 50% of us disagreed with, and most of the rest keeping us in our boxes, in an atmosphere of mutual suspicion.

Our country has been stolen from beneath our feet, the right to protest has been taken away, and the cameras are turned on the victims.

'Things can only get better'
'I will not allow house prices to get out of control'
etc etc

Albert Hall, Blackburn, Lancashire, UK

clear message from the bank of england - lend recklesslessy, borrow frivelously ........ we'll bail you out every time.

(but let you keep the profits when your making loads)

andy, preston ,

A few days ago windbag Blears was demanding to know from where would the Tories find £7bn to fund restoration of the 10p tax band. How will you pay for it? is the usual Labour chorus

Now, it seems there's no need for her or anyone else in government to explain from where the odd £50bn will be sourced to support the general banking sector bail-out with more if needed; plus, of course, the existing £50bn or so to underwrite Northern Rock.

Who exactly picks up the tab if all or any of the latter goes belly-up?

m collins, Leeds ,

the term "headless chickens" comes to mind,
will someone please be so good as to put the goverment out of it's and more to the point our misery

jay, cardiff,

I understand people's concerns at these latest developments but is there any real viable alternative? I'm not saying I'm happy with these plans but what else could be done?

Paulie, Loughborough, England

Times were good and the banks only cared for their shareholders. Now in a credit squeeze, they still want to keep the shareholders happy at the tax payers' expense. This should not be allowed.

Hamad Lone, London, England

Instead of giving the banks this money , which will have an unknown effect on the economy ,why not introduce a mortgage interest relief scheme(remember it) for those who can demonstrate genuine need. Or is this a too socialistic solution for Brown and his cronies.

A.Williams, Cradley Heath,

This is wicked and amounts to an abuse of power. The modern financial sector, with its obscene levels of pay and bonuses and lack of probity or responsibility, needs a good kicking and bringing down to earth. It's unbelievable that a Labour government and the Bank of England are colluding in this way, using taxpayers money to try to prevent this happening. The banks made record profits last year - let them dig themselves out of the black hole they've created. Who will weep if they have to start earning their money honestly for a change?

Guy Brown, London, UK

This magnanimous offer could not possibly be shrouding the government's understandable concern regarding the lack of incoming Stamp Duty Land Tax which they receive from property purchases in a failing property market could it?

marionmarchant, Reigate, England

Theres an important saying in investing:

Only invest in a business that an idiot could run - because there will be a day when one does.

Next on the agenda will be the credit-card crisis
Can you remember when it was actually easier to get a credit card than to get a savings account?

We a over taxed, paying extorniate morgage rates, food increases, energy increases, fuel increases. Now is the time that people will start defaulting on payments.

Capital One were the worst, they had an agressive campaign in Europe to get new business but offering cards to anyone.

They are now reporting increases in defaults (whilst the company director have been selling shares over the last 8 years). I'm personally 'shorting' their stock (ie. betting they will fall in value), because there business model was even more shocking than northern rock.

Ian, manchester, uk

For house prices to go up some idiot has still got to pay more for it than the person who bought it 12 months before. With dispoabale income decreasing the only way to achieve this is by taking on bigger and bigger debts. This action will only make the bubble even bigger.

Chris, Banbury,

SOOoooo, the Banks have lost our money, and now the Government is lending them OUR Tax money to bail them out !! Theres more to this than meets the eye...

C Stone, Enger, Germany

It has always been difficult for first time buyers,easier when children left school at 14 able to read and write ,and able to go out into the wide world and "earn" their living,via an apprentiship.Thus enabling accumulation of a deposit at the ripe age of 21.

D.C.Bevan, Huntingdon/Cambs, England/UK

You can't fix a debt problem with more credit - it's really as simple as that. All they are doing is prolonging the inevitable - and when the day of reckoning comes, it's going to be that much worse.

Ultimately, the current global financial system is doomed...but that may not come for a while yet. This video is quite long...but it does a good job of providing the 'big picture'

http://video.google.com/videoplay?docid=-9050474362583451279&q=money+as+debt&ei=76EMSM-kE4emrwLc-amxBA&hl=en

Nick, Reigate,

If the banks expect the poor taxpayer to bail them out, then maybe we, the poor taxpayer, can expect a payment holiday on our mortgage payments.

scott driver, glasgow, scotland

Fair is foul, and foul is fair:
Hover through the fog and filthy air
There is something dirty in the United Kingdom
Labour has unleashed the silent pickpocket of currency devaluation and inflation. Your pocket will be picked to save the bacon of the greedy and powerful.
The army of midget property developers, and those who took on unaffordable mortgages (with cheap money lent freely by the banks) cashed in on many thousands of pounds in a crazy and awesome property bubble, these people are now at risk of seeing some of their massive profits decline in falling house prices.
In order to save these people the Bank of England has cut interest rates three times.
With the result my savings in my bank has declined by more than 20% due to currency devaluation and inflation since Jan 2008. This is the same for millions of people including pensioners who have savings. We are being punished while the greedy and imprudent are rewarded and bailed out.
Beware! The 50 billion pounds lent today of YOUR money WILL be at grave risk if property declines to more than 25%.
The government will simply print more money to meet its obligations lending out of thin air - treasury gilt, offered as security is simply a large banknote bearing a promise to pay stamp. But there is no such thing as a free lunch.
The Governments “silent pickpocket” will be working even harder – as more pounds are created the value of the pound in your pocket will shrink. Prudent people will watch their savings disappear. There is no such thing as a free lunch, if you bail out greedy bankers in such a huge way, the common man will pay by getting poorer by losing the value of his money.

jaffa Levy, london,

Yet another oxygen bottle trying to avoid the inevitable. Don’t they understand that resistance is futile? that an era came to an end? For one, the burst can NOT be avoided anymore because it is already happening. For two, it was bound to happen sooner or later: The sole uncertainty was the timing. Spending billions trying to avoid what is already happening is futile. . Spending money to cover speculation losses is both irresponsible and immoral. Using taxpayers’ money for that purpose.. that is a NEW LOW for NEW LABOUR.

Rui, Lisbon, Portugal

So much for dislocating BoE from the treasury... Congrats Mr. Brown and a round of applause for the man who could quite possibly have thrown one of the most empowering countries in the world into the worst recession in History......! I'm thinking that Australia looks even more interesting now, at least I can live there without the restrictions imposed by this headless chicken they call a dictatorship, sorry government (of a communistic ilk)

CK, London,

This move is purely political. It shouldn't be allowed. The Bank of England should be made wholly independant after the next election. This will go down as Labour's black wednesday in the eyes of many voters.

Warren., Southport, Merseyside

I run a small business.

If banks cant lend then UK business cant invest in training, technology etc and wont be able to compete internationally. Hence, many British companies will fail, making millions of British workers redundant.

City workers will relocate to the Middle East/East (eg Dubai) causing a downturn in UK employment and tax revenue. Those employed in the city (5% of British workforce) pay over 20% of all tax.

Hence, by assisting the banking sector will hopefully prevent the British economy from collapsing!

To sum up:
1. If the city collapses, the UK will lose the main stay of UK economy and some 20% of tax revenue
2. Many British companies throughout the UK will be unable to invest in their business',will become uncompetative and so will collapse causing mass unemployment.
3. The ever expanding numbers on benefits will be unsustainable because there will not be enough business' and working people to pay the ever increasing amount of tax required.

Karran Oconnor, Gloucester, gloucestershire

Anti-Brown bloggers - stick to what you do best, which is heaping ordure mindlessly on Labour politicians. But please, leave hard economics and finance to the grown-ups! I've never read so much economic illiteracy in my life as in the first fourteen out of fifteen comments on this blog. The word "bailout" in the headline doesn't help understanding, admittedly. The £50bn is not a handout, and it doesn't spare the shareholders potential pain. The "haircut" ensures that the banks have to sell the mortgages to the gov't at a large and variable discount. But the intervention helps the rest of us by keeping the UK economy humming, yes, it helps even the ungrateful Brown-haters who pretend that the last 11 years of high employment, high minimum wages and high growth somehow never happened.

Wilf, London,

The greater the banks' incompetence and greed; the more they are compensated by our government.
UK is the laughing stock of the world and a gravy train for those who make really big errors.

Howard, London,

Why doesn't the government use this money to lower the fuel prices? I'm seriously considering chucking in my job because I can't afford to get there anymore.

M. R., Stockport,

Surely a Labour government should us the 50 billion pounds to help key public sector workers get on the housing ladder in London. House prices are over-valued. I never thought I would see a Labour government bail out the rich private sector at the expense of the working man. Added to this, they have abolished the 10p tax rate.

Karl, London, UK

Typical the banks and theirs customers get in to trouble through their own greed and make no mistake that is what it is sheer greed, and the rest of society that does not takes unjustifiable risks ends up paying for it because thats what will ultimately happen won't it.

Mark, Reading, UK

Gordon the Moron sold our gold reserves at the bottom of the market, now the BoE is nationalising mortgage debt at the top of the market. Things can only get better!

Paul, Coventry,

Further evidence- if any was ever needed- that this country stands on the periphery of an economic catastrophe.

If a bank or building society has lent irresponsibly then it should be forced to confront it's miscalculations and shortfalls as all other businesses do- by going to the wall. Not through being propped up public funds.

When banks et al offer mortgages, loans, and other forms of credit to people unable to pay them back then it is little short of moral bankruptcy and a poor display of commercial judgement. I knew somebody who was unemployed and yet still obtained a mortgage on a £120,000 house- the bank took a very laissez-faire approach in asking him to prove his income. A friend who works for RBS told me they were under enormous pressure to sell each mortgage no matter the viability so cutting corners is (or was) commonplace.

And to think we have to pay for this?

Darren P., Greenhithe, Kent, U.K

THIS GOV IS RUNNING SCARED - With the elections soon they are worried - GOOD
Too late Brown - you should have put money aside when times were good and not spent it on your pet projects - Suggest you withdraw the 100 million for mosquito nets - we need this money in this country.
Look after this country first.

Margaret, Bristol, UK

The problem is that, if this dubious scheme is successful, it will simply encourage more failure and if it fails, well it just fails. Barring some statistically negligible chance, it will end up the same either way, the taxpayer will bail out banks, shareholders and directors.

Its a multiplier bet on the back of the half-baked rescue plan for Northern Rock, itself pushed into the long grass far enough to ensure that a different government will be picking up the tab on our behalf. No jackpot here, the only win is to get out of a hole whilst risking increasing its size.

Bad lending decisions are not solved by making further ones. The moral hazard remains. Does anyone seriously consider that the Governor, in moving his position so drastically, has not been leaned on by the Government?

Our central bank has now itself entered the sub-prime market. We may expect the pound to recognise this fact. Should it rise, then the markets will be putting appearances before reality.

Steve Buckel, Braunau-am-Inn, Austria

Greg , Kilburn - People have used their houses as an ATM machine. If prices drop too much the whole country will be in debt and with no discernible pension provision for the majority coming up where would that leave a government grubbing around for middle class votes?

judy, Liverpool, England

I watched the South Yorkshire mining and steel-making industry exported with little help from the British government or the EU

The motor manufacturing, ship building and light engineering industries similarly was sacrificed on the altar of market forces.

What a total disgrace this government has become.

R Bingham, Lauzun, France

They're using my money to keep prices artificially high and stop me from buying a house. I have always voted Labour but no more. I have been working hard and saving while waiting for the craziness to stop but now the Labour government won't let it. I am very disappointed Mr Brown. How can you side with the speculators and bankers? You really had me fooled.

Greg, Kilburn London, UK

I am surprised that so many people are surprised by this. The reason the Gov't want people to own their own homes is because it means they are committing to a life of debt and reponsibility. As a result they need to work. It we work then we must pay income tax which is the Gov't biggest source of income. Why do you think companies love it when you have responsibilities? It means you have something to work for. The Gov't is just a big company.

Now - as soon as property market becomes a less attractive investment less people buy. Hence less income tax, a weaker GBP and all the other knock on effects of a poor housing market. The Gov't cannot afford for the market to reach the same state as the early 90's hence the £50bn bail out.

Now the more astute amongst you will know this and have property investements. An investment backed by the Gov't - does it get any better? I dare say the banks already knew this...........

Paul, London,

At least uneconomic pits gave fuel in return for subsidy.

simon, london,

All this criticism is getting a bit boring now though. George Orwells 1984 never seemed so more apt. Are you really surprised that the rich are looking after themselves at the expense of the naive working classes?? It always has and always will be this way.

Kv, London,

When house prices were going up it was reported as being bad. Now they are coming down it is reported as being bad. This is just politics - the government wants to risk huge amounts of tax payers money just so it can keep house prices from falling too far until the next election. It makes me sad that our ploitical class is so cynical

Gwilym Ashworth, Wisborough Green, West Suusex

Now we know why they doubled the bottom rate of income tax.

Get out... Let Osbourne have a go.... He can't make a worse mess.... can he?

Can he?

tris, dundee, scotland

I wonder how many of these bank managers will be sacked for their incompetence.

John, Darwen,

It make me laugh:

"However, the City appeared to be underwhelmed by the terms of the bailout this morning."

They are getting a freebie with my taxes to protect their bonuses.

Are they just waiting for New Labour to come back with a better offer and a wagging tail?!?!

It makes me sick and I am emigrating to France in 6 months.
My cost of living will be half and my lifestyle far better.

Not so Great Britain is on the slide down a 90 degree slope.

Jay Tee, Oxford, UK

I earn approx £14,000 pa so I have paid more tax this month in order to help those more wealthy than me. Now those same people are getting even more help from this government.

When can I expect to get anything back? Or should I just learn to keep quiet and accept that's my lot in life.

Sue Taylor, Banbury, Oxon

Does this mean that the present unsustainably high house price level will be encouraged to continue, distorting the whole economy? House prices should be allowed to fall over a period of time to a sustainable level. Maintaining the house price bubble can only lead to a bigger catastrophe in the future. To prevent the same happening again, lending should be limited to 3 times annual income, as used to be the case.

Dave, Wrexham,

My Comments well there is only one - Discraceful !!

Peter, Aldershot, UK

Never in my life have I been more angry with the political and financial elite in this country. Everyone's earnings and savings are being eroded by high inflation and currency devaluation and now our taxes are being used to bail the banks out of their losses, caused by their reckless lending practices. It is disgraceful and should be illegal.

Paul, Coventry,

This proposal is a complete nonsense?

How is the Bank of England going to value the assets put up by the banks as collateral? The market can provide the true value, but for this plan to work the Bank of England has to buy these mortgages at a price much higher than the market price.

It will bail out those banks that have borrowed excessively from the money markets, in effect subsidising the foolish, at the expense of the sensible banks that have lent only against deposits.

And what happens if a bank goes bust? Will it be the Bank of England sues one of our major high street banks for bankruptcy if it cant pay?

There are more anomalies and distortions that will be caused by this non-sensical proposal than I have space to write about here. What the Bank of England should do is nothing. Let the market sort it out.

Dave, Bristol,

Sadly, you seem to make the same mistake as the politicians in assuming that we have seen a failure of the market. We have not.

The market has responded (and continues to respond) perfectly logically all away along the line - unfortunately it has been and is responding to failures in policy - most noticeably the constant tampering with interest rate in an attempt to micro-manage the economy (the “Greenspan Put”) not to mention failure to control government spending and borrowing.

As such, the price of money does not always reflect accurately the true price of risk.

So called “reckless lending” is not a symptom of market failure but rather a logical response to such policy stimuli (as is the consumer’s “reckless borrowing”). It is based on the rational (and, it turns out, correct) assumption than central banks and politicians will panic at the first sign of trouble and step in to bail out any such reckless lending and borrowing (particularly if it affects voters).

Huw Sayer, Norwich, England

The Treasury source stated: "“...he wants to do everything he can to help people get on the property ladder”.

So, our own Chancellor is openly attempting to keep the pyramid scheme that is the UK housing market going, for just a while longer, by drawing in even more young people into buying into this property bubble, and in the process, committing themselves to a lifetime of debt-servicing. And this at a time when virtually everyone recognises that UK property is vastly overpriced and needs to deflate.

The bubble has caused our problems, and this Chancellor's response is to desperately find a way to inflate it further.

What a disgrace that a Labour Chancellor is prepared to do so much to preserve the wealth of the bankers and well-off property owners at the expense of this country's younger generation.

Toby, London,

Surely there should be 1 rate for people looking for 90-100% loans and one rate where those who have for example 50% equity pay less. This would stop speculation on housing by people coming in with little deposits. Isn't that sensible lending principles?

Paul, London,

This is a disgrace.

The banks lap up billions in profits, but still are bailed out by the Govt when those profits are endangered.

I tell you what. For every pound of taxpayers money spent on this corrupt scheme, I'd like a rebate on my income tax, represented by a percent of the banks profits created by the bailout. After all, it's my money they are 'investing'.

The banks should be dipping into their own margins to fund their own incompetence.

Darren, Norwich,

I don't see how this scheme will help "grease" the inter-bank lending situation. The credit crunch is based on mutual suspicion, banks worrying about counter-party banks' credit rating and any undisclosed sub-prime mortgage related risks.
If Bank of England will swap 90 of government bonds for 100 of mortgage/credit card book, but the transaction must reverse (swap back) in one to three years, then the underlying risk on the mortgage/credit card book still remains, and must have an effect on the bank's credit rating (at least in a sane world!)
The only way this will work is where a bank goes belly-up and the taxpayer picks up the discount cost.
Is it really a great idea?

john F, aylesbury,

What a disgrace and climbdown. Reckless lending is now rewarded. Sensible savers prepare to lose big time as inflation will rocket. Mugabe would be a better leader for this country, at least he is consistant.

John, Lincoln,

Welcome to "Darling's patsies" - he is desperate to get people onto a rickety housing ladder - pity those who fall for such naked political posturing - a lifetime of debt in exchange of a few votes in May.

Huw Sayer, Norwich, England

This is simply outrageous. The banks are still making billions in profit and now the tax payer is to take all the toxic waste of their hands? Who is running this country? Bankers and property investors it would seem.

These corrupt buffoons (new labour) need be removed from power as a matter of urgency!

A Hariis, Ketteing, UK