Business 2000: When banks get it wrong, governments come to the rescue

Susan Hayes examines the government's handling of the banking crisis.

5th May, 2012

During July 2011, the cost of government borrowing was at its highest level since the European debt crisis began, at 14 per cent.

In essence, this means that, if the state wanted to borrow on the financial markets, lenders would have required a punitive 14 per cent interest.

The reason they would demand such a level is because they were worried that they would not get paid back their money (a situation called default). Since then, however, the...

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