Darling issues emergency statement

After speaking about the international nature of the current problems Alistair Darling identified what he was going to do at home to help the financial crisis, these included a promise to do anything it takes, and to publish the Crosby report shortly. Here are his four points:

First, the Bank of England will continue to do whatever it takes to make cash available for banks to lend.

Second, the Banking Bill will be introduced tomorrow - building on the special powers we took in February to allow us to intervene quickly and decisively. It will also give the Bank of England a statutory role to maintain financial stability - to complement the role of the FSA.

Third, just as at an international level lessons need to learnt, we need to ensure our regulatory system here is up to the mark. It's not about light-touch against heavy-handed regulation, it's about making sure that we have the necessary rules in place are that those rules are enforced effectively. I have asked Adair Turner, the Chairman of the FSA, to make recommendations for reforms. And as recent events in financial markets have shown us, regulation should be about liquidity as well as capital. That's why the FSA is considering changes to liquidity requirements. They are also looking at remuneration structures in the institutions they regulate.

Fourth, we must do everything we can to ensure that not only do banks have the confidence to lend to each other, but also that lending is maintained to the mortgage market, businesses and individuals. I shall publish Sir James Crosby's recommendations on options for improving the functioning of mortgage finance markets shortly.

Alistair Darling also outlined what has been done so far, so just in case you missed the first few months of the crisis here is his recap

Since April, the Bank of England, with support from the Government, introduced the Special Liquidity Scheme - providing funding to the banks. The Government has made available in excess of £100bn of long-term funding to be lent through the scheme - and the Bank of England has extended it until January.

I am willing to make further resources available as necessary. The Governor has made clear that: "in these extraordinary market conditions, the Bank of England will take all actions necessary to ensure that the banking system has access to sufficient liquidity".

The Bank of England has also continued to inject substantial funds into the markets through its normal operations - and it will continue to do so. Tomorrow it will put in another £40bn, taking a wider range of security - and these operations will continue into November.

In February we took special powers to bring Northern Rock into public ownership - now seen by most people as the right thing to do. I can tell the House that Northern Rock has now paid back more than half of the taxpayers' money that was lent to them, and continues to repay its loan ahead of schedule.

In August I announced that the Government would swap up to £3bn of outstanding debt for equity, if required, to strengthen Northern Rock's capital position.

In September, we amended the competition regime to allow the interests of financial stability to be considered in the merger between Lloyds TSB and HBOS. We took this exceptional measure because financial stability had to come before normal competition concerns.

And ten days ago, we had to deal with the problems at Bradford and Bingley. We transferred the savings business, the branches and the related jobs to Abbey Santander, protecting savers, and took the rest of the company into public ownership.

We acted decisively to protect savers and also to protect the interest of the taxpayers - ensuring the financial sector bears its share of the costs.

The FSA has announced a further increase from tomorrow to the compensation limit for retail bank deposits - to £50,000 per depositor which means £100,000 for joint accounts. This measure will ensure that 98 per cent of accounts are fully covered. And the FSA is consulting on whether to increase this limit further, to ensure that arrangements here continue to be comparable with international best practice.

Finally Mr Darling outlined a need for cross country intervention, and pointed to a series of meetings that are to take place thoughout the rest of the week.

"However, I also believe that wherever it is possible to do so, countries should work and act together to maintain stability. This afternoon the European Union Member States have reaffirmed the need to take whatever measures are necessary to maintain the stability of the financial system, whether through liquidity support, action to deal with individual banks or enhanced depositor protection schemes.

In light of what has happened over the weekend it's especially important that EU Member States work far more closely together. So tomorrow I will meet European Finance Ministers in Luxembourg, to further discuss how we bring stability to the system and protect depositors. Mr Speaker, this further demonstrates that every country in the world, Europe included, is being affected by these problems.

In the United States, Congress has now approved measures to support their banking system, which we welcome. Our approach has been different - but what has happened in America emphasises yet again the need for countries to take whatever action they believe is necessary - but to also work closely together not just to resolve these problems but also to try to prevent them happening again.

Later this week I will attend the G7 and IMF meetings in Washington."

Lets hope that the these meetings produce some radical policies to kick-start the markets again.