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TOPICAL DEBATES Financial Stability

I agree with a great deal of what the hon. Member for Leeds, East (Mr. Mudie) said, and I might come on to a few of those points. Government action has been required to recapitalise the banks for quite a while. It was made particularly urgent by the collapse of Lehman, which sent shivers through the banking system. Cash hoarding and de-gearing by banks was being reinforced by counter-party risk, with the banks themselves fearful that other banks might go bust. Finally and belatedly, the Government have responded to widespread calls for a recapitalisation plan, and I think we should support it.