European banks benefit from government intervention

Banks across Europe appear satisfied after the continent’s big players vowed to support the banking industry.

In Britain the Royal Bank of Scotland, HBOS and Lloyds TSB rallied after Gordon Brown announced the British Government was pumping billions into banks to boost capital.

Britain, France, Germany, Spain and Italy have all introduced plans to inject cash to free up interbank lending.

The financial crisis will top the agenda when EU leaders meet at the European Council in Brussels on Wednesday.

In total European governments look set to allocate more than 1 trillion Euros to protect the continent’s banks through guarantees and other emergency measures.

Economists are hinting that financial meltdown has been avoided however, the threat of global recession remains.