On all these 'Have your Say' sections, everyone seems to think a re-adjustment of house prices will be a good thing, how??? For all us thousands of people who will be plunged into negative equity overnight with no hope of selling up to clear the debt, nor any chance of re-financing the debt, and stuck with increasing interest rates meaning we can't afford the debt, how the hell is a reduction in house prices a good thing??? I believe House prices now need to level out and stop increasing at the silly levels they were, but them dropping in price is not a good thing for the many thousands of homeowners who are going to lose out big time.

How is that good for the economy???

Luke, Wootton Bassett,

Can't the bank of England make the money available to home owners who need to re-mortgage?

Make mortgages available from the BoE at a sensible rates, bypass the private banks. More security and a better deal for home owners, less risk for the state. Everyone wins?

Matt, UK,

What a load of nonsense. The Blame lies fairly and squarely with the : "I want it now brigade" who gorged themselves on cheap credit and on the basis that their homes' ever increasing values' would pay for their profligacy. Now that financial sanity has returned they expect the rest of us to foot the bill...dream on.

J. Bridges, Chichester, UK

A simple piece of legislation; 3 month period within which all borrowers can fix their current rates for 3 years. A 6 month period in which all borrowers can seek better deals or accept their lenders rates in 6 months time. It removes uncertainty and makes the banks responsible for their own debts.

Steven, Sunderland, England

"Market forces will decide the true value of housing"

No they won't. How can they when the state has such restrictive laws governing the supply of housing?

Alex, London,

Did Conall Margam, West Glamorgan read the article or take a blind run at it. The article clearly states that the markets were not as free as was believed and that over-zealous regulation has lead to a reduction in competitiveness in the banking market and government insistence to a disaster.

karen , Macclesfield, uk

No one has mentioned here why the government (ok I know its meant to be the independent, hand picked, aspirational knights, who just love Keynesian economics like its the only theory ever) sets the price of credit (base rate). They don’t set the price of coffee, TVs or cars (well not quite)!

Robina Hood, London,

What! Banks have not grown fat on regulation; they've done it for market share and cost-cutting (RBS-Ambro anyone?) Which particular saver would've done due diligence on Northern Rock? All those clever, highly-paid fund managers made a mess of that at £12 a share - what hope a pensioner?

Nigel Madeley, London, UK

1,I am very concerned that the bonds being issued are against properties that may or may not be in this country
2,That many of the loan to equity rate may be above 90% .
3,that the released funding will be used to fund mortgages and fluidity outside the UK mortgage & bussiness market

tony seaton, Southampton,

Another hack for the banking establishment. Their apologies for the bailouts are falling more and more on deaf ears. The sheeple are beginning to realize that their excuse of saving the financial system from disaster is just a front for protecting the banks from insolvency.

shawn, altoona, us

Maybe the gentleman has something to lose if his local bank goes bust, so suddenly it makes sense to rescue it....FEAR. We all have something to lose when our planet goes bust but the free marketeers are so short-sighted they don't see it - but they will never blame this most primitive driver: GREED? It will be Governments' fault for sure! They haven't had the courage to invest in sustainable economies when the times were good for sure but they would not exactly have been encouraged to by sneering free marketeers. On environmental terms too we are living above our means. GM plants bio-fuels are the equivalent of CDDs and CDOs. And the rules can be simplified they are called: restraint in every area of life but its not in human nature, is it? Start by looking at world populations but few dare mentioning this.

Esther Phillips, Leatherhead,

Regulation will never work. Companies will always find ways around any form of regulation. If companies know that they will always be bailed out by Govenrnment then they have no reason to apply prudent risk management. The Vince Cable comment captures this exactly. If we are to bail out these banks (which I agree is probably necessary) then we must make the banks pay a high price for this. We must place onerous terms on providing this. For example, they should be excluded from paying dividends and senior staff bonuses for a period of time. Senior staff salaries and other perks should be frozen for the same period. We cannot have the situation where the senior management, they are the ones who decide on policy, can do as they wish without any risk to their own personal circumstances.

John, Reading, uk

The BOE bank bail-out violates the EU competition rules that PM Brown re-committed us to honour short months ago, it is illegal so not open to us.

Lazy negligence by the Chancellor, his predeccessor and their top financial panjandrums, was necessary but not sufficient to the credit famine; but the greed of banks and building societies, and the enormous bonuses their selfish executives focused upon, were as essential.

Darling and King need to be sacked, not for their follies but because they were right about Northern Rock but failed to stand up for their beliefs, so are known to be spineless.

We cannot visit the full consequences of their imbecilities upon the banks, but a strong Chancellor and Governor could and surely should hit them hard. Which is why they want to keep Darling and King. Which is the ultimate justification for replacing both.

Noel Falconer, COUIZA, France, France

This is the equivalent of when the gas runs out in a hot air balloon, paper money is then thrust into the burner and burnt instead. Very inefficient and the result is the same, the balloon eventually returns to earth. I just hope this is not the start of the collapse of the entire monetary system.

If property was not so out of line with incomes then there might be some hope to this.

Of course the architects of all this will have had their fat bonuses and be able to exit stage left with a bulging pension pot for someone else to pcik up the tab. That would seem the taxpayers with unlimited liability.

Alan, Luton,

".. the US Government actually compels banks to make loans to poor people in poor neighbourhoods, regardless of financial prudence. .. the Community Reinvestment Act of 1977"

Not mentioned is those funds came from the US taxpayers - NOT the banks - in the form of Govt grants to wealthy bankers who then lent the money to the poor at a rate of interest which THEY collected but did not repay to the Govt (the taxpayers really).

Blustering and bravado in-favour of 'Free Markets' whilst railing against ANY mention of a National Healthcare system (deriding it as 'Socialism') - the American politicos expose their hypocritical selves as they again give a free ride to their financial backers on Wall Street in their typical 'quid pro quo'.

So much for 'Free Enterprise'.
This is where true 'Conservatives' differ with the GOP.

What's needed of bankers is the same penalty Lloyd's 'Names' suffer for for laissez-faire investing - seizure of their personal assets to cover losses.

Larry, Middletown, USA/NY

I don't have a problem with this bailout but I'd like to see some conditions placed on the money in order to avoid the moral hazard implications of allowing private companies to privatise their profits but socialise their losses. The most appropriate condition as a first step is a limitation on the remuneration that the bank executives can get until the loans are repaid. Say for instance no executive to earn more than the highest paid public servant in the land.
This sort of measure would a least make turning to the government a last resort option and would impart some mild pain where it is most deserved, on those who got the banks into this mess.

Phil, London,

Alleluiah! A sinner repents! Free markets need to be controlled by government. Free markets are so incontinent that they can't control themselves. Thank you Eamonn, as an long-time extremist free-marketeer for this confession. Yes, there IS such a thing as Society after all!!!

Conall, Margam, West Glamorgan

Why is it that so many Have Your Say comments on articles like this are in agreement that a housing market readjustment is necessary, when those with their hands on the reins steer otherwise.

Could it be more than one eye on the ballot box? If so this is the worst sort of power obsessed corruption possible, and the government is not fit to govern.

But then once out of office they will take up lucrative directorships with the very banks and finacial institutions they are now pandering to. Something smells very very bad.

Andy, Plymouth, UK

When the music stops, it 'll be Labour without a chair?

Oh! how Gordon must regret not seeking an electoral mandate last year. He could have had five years to clear up the mess that his ten years of 'prudence' created.

Mind you, when the pound equals the euro, another Labour devaluation is on the cards . We can join the Eurozone. Gordon's "five tests" passed with flying colours - Britain "at the heart" of Europe blah blah.

Who has switched the music off? Where's the Minister responsible? Come out wherever you are MacCavity.

michael murphy, brightlingsea, england

This £50 billion support and any more that follows has to be made available to all banks operating in the UK and that includes the hundreds of foereign banks with operations here. Therefore what needs to be made clear is whether the securities that are being swapped are all backed by British mortgages or is the taxpayer also having to finance others in the US and elsewhere.

figurewizard, Petersfield, UK

"why exactly are banks so huge these days? ... The only banks that can afford to deal with this bureaucracy are the big ones"

Nonsense! Banks have become bigger in the UK as a result of a) de-regulation and the big bang in the 80's b) the global economy c) bigger banks generally leads to better capitalisation, better access to markets, more efficencies and therefore bigger profit so banks merge and grow when they can.

Kevin Thompson, High Wycombe, UK

"But when the Bank of England swaps nice, secure Treasury bonds for slightly iffy mortgages, I can't believe that our money is safe as houses." - Perhaps they are precicely that - liable to a 20% downward adjustment in value in the medium term.

BJAKelly, Cork,

My mate who's a greengrocer says he bought some vegetables the other day which went rotten overnight and it's meant a nasty loss of profits. So he's very happy to see that it cannot be his fault and that the government is to blame. He says he's going to become a bank rightaway and get a bit of the £50 billion on offer.

john problem, winchester, uk

The real problem is lack of regulation. There should be legal limits and checks on the amount of money that banks are allowed to lend out in the first place and to whom they lend that money. The bankers, including those at the BoE who left the base rate too low for too long and the government are equally culpable, so lets not say that careless bankers are not to blame, because they most certainly are.

Paul, Coventry,

Market forces gave us house prices doubling every 10 years (or less).
Market forces will decide the true value of housing.
Any messing about by the government via the BOE is just feeding the fire of excessive house price inflation, and is not asking the banks to be party to the risks.
Make no mistakes, the only assets swapped for government guaranteed bonds will be those the banks do not want.
The tax payer will take all the risks, and the banks will cream off all the profits, given their liquidity is bolstered for what they perceive as safer investments.
Unless this 50 Billion (or 100 depending on how bad things get), comes with the ties of greater fiscal regulation it will be like giving 50 quid to an alchoholic .. there is only one way that money will be spent.

Joe, Geelong, VIC Australia

It's the politicians, by creating the boom that encouraged us all to borrow too much and made bankers lend us too much.

The above is utter garbage. If the politicians had prevented a boom, what would your position be? The bankers who loaned 125% mortgages are responsible for the exceptional rise in house prices which need to come back about 50%. The resale and packaging of mortgages will hopefully be curtailed. Any institution which bought such a lousy asset has only itself to blame, the directors should lose all bonuses and go. All banking profits should be spent on rebuying the debt currently swopped for government bonds until the taxpayer is clear again.

J hudson, Bath, UK

Also incorrectly set interest rates, particularly since 9/11 when the MPC panicked into cutting the rate to a silly 3.5%. Even within its remit it was unnecessary. But then it has had loads of opportunities to restore back to neutraility sooner but failed to do so resulting in a colossal property price and consumer boom resulting in a very precariously unbalanced economy today. Lessons to be learnt? No, the government and the MPC have quite simply failed to learn from history and the the last boom/bust wasn't that long ago either...

cww, suffolk,

I'm sorry but in your article you state that:

'Market purists like me don't usually support bailing out failing industries at the taxpayers' expense. Yet the blame ....lies squarely at the doors of governments.'

But nowhere in your arguement do you provide solid ground for this blame. You rail against regulation that makes big banks successful, but criticise the government for not regulating the amount of reserve requirements. What I see is that banks want it all their own way, and our government has done that and we've all lost.

Basically what needs to be done is create a situation where banks are not bigger than the country, and that they don't decide policy, as their motivations are purely self-interested.

No market is entirely free, nor should it be (or pretend to be) as situations like the current one only prevail. I spoke to an important member of the treasury and her attitude (and that of the government) was purely laissez-faire, completely naive as it was.

duncan, Wokingham, Berkshire