The UK and US Governments will pump more capital into nine ailing financial institutions than the entire GDP of the oil-rich United Arab Emirates.
Last week Chancellor Alistair Darling announced the UK will inject £37bn ($63bn) into RBS, HBOS and Lloyds TSB. Meanwhile, the US is understood to have initially committed $120bn to its six largest institutions: JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs and Morgan Stanley.
This gives a total of $180bn which according to CIA statistics even exceeds the UAE’s $164bn GDP (2007 estimate). The UAE consists of seven rapidly expanding states, including popular emirates Dubai and Abu Dhabi.
The bank recapitalisation package also surpasses New Zealand’s GDP ($112bn) and is just under Ireland ($192bn) and Denmark ($203bn).
Put another way, the amount spent to stabilise nine global banks is more than the yearly income and output of these nine countries combined – Croatia, Cameroon, Paraguay, Jamaica, Malta, Fiji, Zimbabwe, Guernsey and the Isle of Man.
The UK Government looks likely to smash its record monthly borrowing amount in October to pay for its injection into the banking system.
Figures released yesterday revealed the Government borrowed over £8bn last month, an all-time high.
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