Despite the enormous advantage his proposals give British banks and building societies, Chancellor Darling has not even attempted to explain how they are compatible with EU competition law. Because he can't? They do seem to be in clear violation of this, and thereby illegal and not open to us.

Noel Falconer MEcon, Couiza, France

Well that's this year's City bonuses sorted then.

Scamp, Aberdeenshire, Scotland

Exactly Mr Barraclough. NR was not insolvent. It was illiquid. There but for the grace of....
Any bank lends way longer than it borrows and lends a multiple of its capital. Every bank is therefore technically bust all the time.
Whoops. Should have put a liquidity raft under NR not nationalised it.

Tom, London, UK

Dave Hunter
If mortgage holders default then the securitized mortgage portfolios (bonds) will reduce in value. They are not one for one against mortgage, they are portfolio of say £500m of mortgages of a certain quality. The foreseeable risks are already priced in. The BOE is haircutting the bonds, i.e. lending only 80% of their value so that nothing happens if their value falls up to 20% and after that the banks have pay up more collateral for there existing borrowing.
BTW - in EU and UK, mortgage borrowing is with recourse, in the US, no recourse. So in USA people hand over the keys and walk away with nothing further owing on their 100% mortgage. Here at home, the bank comes after you for all its costs. Hence it's pretty safe.

Tom, London, UK

this corrupt government will bankrupt us vote them out

den F, halesworth, uk

My mortgage lender has always increased my mortgage when the bank rate increased,but the last 4 occassions when the bank rate was reduced they never reduced my monthly payments.it is us who should be helped not these banks .

mohamed hussain, london, england

1) Banks will not lend to other banks because they won't accept packaged mortgages as collaterall.

2) The Government IS prepared to accept these packaged mortgages as collaterall.

3) Who do you think knows more about what's inside these packages - the banks or the Government?

4) Who is likely to have bought a 'pig in a poke'?

John Bull, Consett, UK

If RBS needs to raise £!2 billion to restore it's capital ratios and the other major Banks are queing up with their own rights issues £50 billion is not going to achieve much.It will serve to underwrite cash calls up to that amount. However this is only replenishing capital not really creating new. Asset values are still very difficult to determine so real downside risk cannot yet be accurately calculated. It would have made a real impact 12 months ago.The fairly request from Loyds TSB to the Bof E for a two loan guarantee to enable it to take over Northern Rock looked a great deal for the Bof E that completely got away.
With increasing problems in the "real economy" the Banks have found a benign and probably the only underwriter for their forthcoming rights issues. The effect on the mortgage market looks less certain until the fundamentals can be reassessed and asset values are known to be firm again. Meanwhile the FSA should stop the irresponsible selling of financial products.

john wright, clacton on sea, essex

This is smoke and mirrors again. If it's just the case that banks won't lend to each other then there is no liquididity problem. It's simply a case that some businesses (banks) are fitter than others and, by the nature of their robustness,will prosper at the expense of the badly managed who have taken serious risks to enhance corporate rewards and pay excessive dividends. These must fail and their supporters pay the consequence of the"if it's too good to believe" syndrome.

Myles Williams, Stafford,

I am usually baffled by politicians, they seem not to think the same way as we earthlings! If they are making such support available to banks, to help them get over the shrunken inter-bank lendig crisis, then why not just cut Northern Rock loose? Mr Darling says "It is important that banks continue to make full disclosure of their exposure to losses." Well, we know that N.R. had virtually none, in regard to 'dodgy bonds', simply difficulty in financing their lending. Now it transpires, as many of us had suspected, that many other banks were suffering to a lesser degree, having also 'borrowed short -lent long', but were also guilty of being involved in the Americal sourced 'dodgy-bond' situation. Yetv they have not been penalised as N.Rock has been, nor are they being asked to pay a 'penal rate' on their take-up of the Bank of England's largesse. Where is either sense or justice? Is the treasury really prepared to try to fight their corner over this 'nationalisation' in the Courts?

S. Barraclough, Huddersfield, W. Yorkshire

I find it hard to believe that there is nor risk involved.

If mortgage holders default on the loans, who picks up the cost?

Dave Hunter, REDCAR, UK

I find it hard to believe that there is no risk involved.

If mortgage holders default on the loans, who picks up the cost?

Dave Hunter, REDCAR, UK

The BOE are apparently already indicating this will cost taxpayers more than expected. I don't like the sound of that as it sounds like Nulab again buying its way out of political trouble of their own making with tax payers money. Will we get this money back? We are told so but as soon as Northern Millstone was bailed out to the reassurances of Darling and Co we find out it could be years and most likely some future administration will have to write off at least some of it. This gerrymandering with public money should not be allowed and it always benefits what appears to be one of the most deceitful corrupt governments we have ever had. I can only hope that on May 1st and when the election finally comes around this government get the come uppance they all so richly deserve.

MikeV, Bath, UK

Yes OK, but get a move on and cut interest rates. That will help matters

Gavin, Cambridge, UK

We cannot afford hospitals, schools, a decent transport system, etc, etc, etc.... Yet we can afford to fund bankers who will continue to earn sky high salaries + bonuses and pay their shareholders enormous dividends!

Perhaps banks that were reckless should cancel dividends, sell parts of their business, undertake a rights issue or indeed put themselves up for sale.

It seems the goverment will support the bankers at any cost, leaving the rest of the country to fend for itself! This is madness! I will not be voting for this government again.

Neil, Burnley, Lancashire