IMF: Banks nationalization

More banks may have to be nationalised, says IMF

Alistair Darling must stand ready to pump more capital into Britain's beleaguered banks, perhaps
nationalising other high street names, the International Monetary Fund has warned.The Fund believes that although the drastic measures to prop up Royal Bank of Scotland, Lloyds Banking Group and other major lenders had prevented them from collapse, more public money needs to be poured in if the economy is to get back to full strength. The alternative is a "zombie" recovery as banks continue to withhold lending for years, the IMF has told the Treasury.

The warning formed part of a stark assessment of the UK economy. In a double-pronged assault on the Budget, the Fund praised some of the rescue plans but dismissed the Chancellor's claim that the recession will be over by Christmas. It said he must start paying back debt significantly earlier than he projected last month. Full Story