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TIMELINE-British actions to deal with the financial crisis

Published 02/09/2009, 07:01 PM
Updated 02/09/2009, 07:08 PM

Feb 10 (Reuters) - Several prominent bankers will be grilled by British lawmakers on Tuesday and Wednesday over the role banks played in the financial crisis.

Below are key steps Britain has taken since the beginning of the financial crisis last year:

Feb. 17, 2008 -- The government nationalises Northern Rock, Britain's fifth largest mortgage lender, after five months of seeking a private sector buyer. The Bank of England (BoE) had bailed it out in September 2007, after the credit crunch hit the bank's ability to raise cash in money markets.

April. 22 -- The BoE unveils the Special Liquidity Scheme to swap banks' risky mortgage assets for at least 50 billion pounds of government debt. It will run until the week of Oct. 20, 2008.

Sept. 17 -- The BoE extends the Special Liquidity Scheme to Jan. 30, 2009.

Sept. 17 -- Lloyds TSB Group Plc agrees to rescue rival HBOS Plc, scooping up Britain's biggest home loan lender in an all-share deal facilitated by the government.

Sept. 18 -- Financial Services Authority (FSA) imposes a ban on short-selling financial stocks until Jan. 16, 2009.

Sept. 29 -- Britain nationalises Bradford & Bingley after talks fail to find an outright buyer for the mortgage lender. The Treasury says it plans to take over B&B's 50 billion pound ($90.12 billion) mortgage portfolio and sell its deposits and branches to Spanish bank Santander.

Oct. 3 -- FSA announces it will raise the compensation limit for savings deposits to 50,000 pounds ($87,840) from 35,000 pounds, effective Oct. 7.

Oct. 8 -- BoE cuts interest rates by half a percentage point in coordination with other central banks.

Oct. 13 -- Britain pumps in 37 billion pounds ($64 billion) of taxpayers' cash to bail out three major banks - Royal Bank of Scotland (RBS), Lloyds TSB, and HBOS. The government says it will take equity stakes in each of the banks.

Nov. 6 -- The BoE makes a shock 1.5 percentage point cut in interest rates to 3 percent, their lowest level in more than half a century.

Nov. 24 -- Britain announces it will pump 20 billion pounds ($29.7 billion) into the economy to 2010, including tax cuts and 3 billion pounds of capital spending. The stimulus package amounts to about 1 percent of gross domestic product (GDP).

Nov. 28 -- The government buys a 58 percent stake in RBS for 15 billion pounds ($23 billion), after shareholders shunned the bank's share offer.

Jan. 8, 2009 -- The BoE cuts interest rates by half a percentage point to a record low of 1.5 percent. Rates in Britain had never fallen below 2 percent, not even during the Great Depression of the 1930s.

Jan. 19 -- The government launches a second bank rescue plan, under which the BoE will set up an asset purchase programme to buy private sector assets with an initial fund of 50 billion pounds.

-- The government will allow banks to insure against extreme losses and guarantee their debts.

Feb. 5 -- The BoE cuts interest rates by 50 basis points to a record low of 1.0 percent.

Feb. 6 -- The BoE says it will launch a scheme that allows it to bypass banks and effectively lend directly to companies, as part of its asset purchase scheme.

(Compiled by Catherine Bosley; Editing by Hans Peters)

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