Banks back £500bn bailout package

The UK banks have come forward to welcome the government's £500 billion rescue package, but no-one as yet has accepted the offer for cash for shares.

HSBC has come forward stating it will increase its capital – meeting the government demands for bank stability – but will not need the government handout.

A spokesperson said: "Consistent with the objectives of the UK scheme announced today, HSBC will ensure that our principal UK subsidiary, HSBC Bank, continues to be appropriately capitalised, funded from the group's internal resources.

"HSBC therefore has no current plans to utilise the UK recapitalisation initiative."

He added the government's move should now ease the constipation on the money markets – after the bank itself lent some £2 billion on the markets to other banks yesterday.

Building society Nationwide has also welcomed the government move, but says its is already well capitalised.

Graham Beale, chief executive of Nationwide, said: "Nationwide is a strong and well funded organisation with a robust and well capitalised balance sheet. We have managed our business prudently and will continue to do so.

"Clearly, in view of unprecedented market developments, radical action was needed to provide reassurance for the nation's savers, depositors, businesses and borrowers."

He added: "We are pleased that these initiatives extend to the whole of the building society sector, in addition to eligible banks in the UK, as this provides a fair and equitable arrangement for all."

The Co-operative Bank, meanwhile, has stated its capital and funding position remains strong – being fully funded by customer deposits, but it will mull over the government's offer.

"We are currently working closely with the FSA to clarify the details of the newly announced government financial support to the banking industry," a spokesperson said.

"As soon as the details are clarified, the bank will consider whether it would wish to participate in the scheme, but only as a prudent contingency measure to ensure access to additional capital or funding in the event of unforeseen events in the current very volatile market."

Sir Fred Goodwin, chief executive of Royal Bank of Scotland, suggested the bank would take advantage of the offer.

He said: "The government has increased support in a number of important areas. The proposals will enable us to strengthen our position and to support our customers across the economy."

John Varley, chief executive of Barclays, which is unlikely to take up the offer, meanwhile said the package addressed the most significant issues in the market, "namely confidence in the strength of the banking system and the working of the money markets".

"These initiatives, along with the government's announcements in recent days relating to the protection of retail deposits, and the Bank of England's actions to assist the functioning of the money markets, offer welcome stability to the British banking system and will lead to the increased provision of credit to households and businesses," he said.

Building societies should not need any support, but they have welcomed their inclusion in the offer, Adrian Coles, director-general of the Building Societies Association (BSA), said.

"Societies have strong balance sheets, are well capitalised, have high levels of liquidity and have experienced record savings inflows over the past year, but it is good that societies are not excluded from this package," he said.

"Societies' inclusion will give them maximum flexibility to react to the extraordinary events now occurring in the markets."