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Should the government be helping the banks? The Bank of England will swap £50bn worth of government bonds in exchange for British banks' mortgages. It hopes the scheme will encourage banks to start lending to each other again.

The banks have been asking for longer term finance from the Bank of England so they can fill the funding gap, made by the collapse of mortgage-backed securities last year. It will be the biggest ever special initiative by the British monetary authorities to supply liquidity to the British banking system. Good move or not?

No they should raise interest rates to attract in people's money.

If your mortgage becomes owned by the government you are presumably then a council house occupier!

Now let's see. The banks have bought a load of virtually worthless paper as securities, and now that they have found out that they have bought rubbish, then panic sets in. The same managers who made these catastrophic decisions are all in situ, and no doubt in the fullness of time be rewarded by massive performance bonuses. But as money is now tight, they refuse to lend to each other, screw mortgage holders with rates higher than the bank rate, and so we are now approaching the end of civilisation as we know it.

So the government in effect takes on this worthless collateral, and replaces it with "government bonds"; which in effect the taxpayer bailing out the banks for their own mismanagement. But it is simply printed money, and to add insult to injury, they make the life of these bonds a year only, so that this massive cash injection does not appear on the debit pages of the accounts of Great Britain PLC.

We are in deep doodoo. Deeper than many realise. This is not something that will simply blow over in a week or so. So batten down the hatches, for we are in for a bumpy ride!

If banks made bad decisions they should be allowed to stew in their own juice. It's a free market.

The problem is savings, we don't save enough to support our consumption, with the result we needed to securitise mortgage debt in order to sell it to overseas savers. When that market ground to a halt, 50% of our motrgage market dried up, with it a large chunk of our debt laden conumer economy. So the BofE stepping in with its £50 billion is just filling in the gap left by the loss of the secutised mortgage market.

This plan can only be seen as a very short term plan, to have the BofE print money isn't sustainable, for the money cycle before was, we buy goods from China and Oil from the middle east and they lend money back to us. Now we continue to buy over seas goods, but not getting the money lent back to us, and the BofE prints more money. That is vey inflationary!

But as a nation our savings rates are abysmal and collapsed under this Labour Government, so 'we' is applicable to us as a country.

True but its not any governments fault, there is no culture of saving, the building societies where people used to q at have dissapeared, prior to that there were post office savings (prince charles on the 6p, anne on the 3p), stamps. The encouragement is too put money into bricks and mortar? I don't know why. But treating a home as a pile of money can't be healthy for society.

"If banks made bad decisions they should be allowed to stew in their own juice. It's a free market."

Perhaps you will now see what I have been saying on this board for ages... There is no Free Market.

The concept of the Free Market only applies when it is advantageous to a few. As soon as the Free Market starts to look as if it will hurt these people, it is suddenly bypassed.

This is probably the biggest SpinCon that has ever been visited on the British public.

"But as a nation our savings rates are abysmal and collapsed under this Labour Government, so 'we' is applicable to us as a country."

It is not a Labour Government, it is a 'New Labour' one, quite a different beast. It is just another Tory one and it is these Conservative Lite Spivist policies that have gotten us in this mess. If the Conservatives get in it will just be more of the same. I doubt it would be much different if the Lib Dems get in.

I see little point in starting this hare.

We have no input to the decision making and no say.

The comments so far perhaps release pent feelings but do nothing to influence either the government, the BofE or the major banks.

Whilst agreeing with everybody's comments I can only remark on the abysmal failure, again, of MPs of all parties to voice the outrage apparent here.

Yet again, our elected representives are supine and useless in an emergency.

Little wonder we finished up in Iraq.