Time to nationalise the entire banking system?

Governor of the Bank of England Mervyn King has raised the prospect of the wholesale nationalisation of the British banking system saying that the system needed ‘additional measures’ to solve the credit crisis. He said the government’s £500 billion rescue plan had failed to encourage banks to lend more to families and businesses. In a letter to the chancellor, he warned that banks needed extra support from the taxpayer if they are return to normal lending as the UK was trapped in a ‘vicious circle’.