UK banks could pursue a plan that would give faltering companies a way to offload bad debt in order to stave off further bankruptcies and job losses, reports the WSJ. Under the proposal, UK banks – possibly in partnership with the government – would set up a fund aimed at preventing corporate defaults. Faltering companies would give the fund equity in exchange for it assuming debt owed to banks. The proposal is among steps being considered by the government and banks as it becomes clear that a £500bn rescue plan, organised in October, is not shoring up a worsening UK economy.

This entry was posted by Gwen Robinson on Monday, January 12th, 2009 at 5:29 and is filed under Capital markets. Edit this entry.