In his statement to Parliament, Darling said the following (extracted from a Treasury notice)

2 again I hope the House will understand that it was necessary for me to issue a market notice this morning, ahead of the markets opening.

3. In my statement to the House last Wednesday, I outlined the principles of the Government’s proposals to restore confidence in the banking system and put banks on a stronger footing – essential steps in helping the people and businesses of this country – and supporting the economy as a whole.

4. Since then, there have been intensive discussions with UK banks and institutions.

5. And I can today tell the House how the principles, set out last Wednesday, are now being applied.

15. Turning first to the funding of the banking system – or liquidity – the Bank of England will continue supplying sufficient short-term funds. This will include, from today, an unlimited amount of dollar funds available to banks to be swapped for sterling funds – and continued loan operations through the Special Liquidity Scheme.

16. Additionally, today I have announced details of the Government guarantee scheme for new lending between banks – an essential part of banks resuming lending to people and businesses.

17. The guarantee under the scheme will be provided by HM Treasury directly. It will be temporary, covering new lending issued during a six-month period, but this period is renewable.

18. It will be priced on commercial terms, which can be varied at the Treasury’s discretion, but initially set at a premium of 50 basis points above the recent average cost of default insurance for each of the participating banks – it is risk-based.

19. And the guarantee scheme will only be available to those banks and institutions which participate in the Government’s re-capitalisation scheme, as I made clear last week.

20. Mr Speaker, the banks taking part in this scheme are given the option of raising capital in the open market, in the usual way, or through the Government’s Bank Reconstruction Fund.

21. When raising capital through the Reconstruction Fund, the participating banks receive an investment from the Government in return for shares.

22. Let me outline, in turn, the position of each of the eight major UK banks and building societies who agreed to the re-capitalisation proposals last week.

23. Santander has agreed to transfer £1bn of capital into its UK operations.

24. Barclays will raise over £10bn by next spring, through a combination of preference and ordinary shares, raised from private sources and other measures.

25. HSBC announced last Friday that they had injected £750m of new capital, for their UK operation.

26. Standard Chartered have announced that they have already meet their agreed capital requirements.

27. And Nationwide Building Society has announced that it will increase its capital base by £500m.

28. Let me now outline how HBOS, Lloyds TSB and RBS will be re-capitalised through the Bank Reconstruction Fund.

29. Subject to take-up by existing shareholders, the Government will take significant shareholdings in these banks – in one case a majority stake. And, in line with normal commercial practices, the Government on behalf of taxpayers will have appropriate representation on their boards.

30. These shareholdings will be managed on a fully commercial basis by an arm’s-length body – with a precisely-defined remit – to act in the interests of taxpayers.

31. Government support, in respect of these three banks, is tied to conditions covering executive pay and dividend policies.

32. Conditions have also been agreed, with them, on the level of lending to small businesses and homebuyers.

33. We are making it clear that there will need to be a strong focus, at these re-capitalised banks, on making available lending for small business and homebuyers.

34. These conditions are set out in the individual agreements with the banks – copies of which will be placed in the library.

35. Mr Speaker, in the case of Lloyds TSB and HBOS, the Government will purchase both ordinary and preference shares once the merger is complete.

36. HBOS will receive up to an £8.5bn investment into newly-issued ordinary shares on completion of the merger.

37. The Government will also invest up to £4.5bn into newly-issued ordinary shares of Lloyds TSB at completion.

38. At the same time, we will invest up to an additional £4bn in preference shares in the merged institution, with £3bn of which being invested in HBOS and £1bn in Lloyds TSB.

39. In return for this investment, which potentially represents around 44 per cent of the proposed merged bank, the Government will appoint two independent board members.

40. No cash bonuses will be paid to any board member this year. Directors in HBOS will be asked to relinquish their rights to bonuses and directors in Lloyds TSB will receive restricted stock instead of cash for any 2008 bonus entitlements.

41. The availability of lending to homeowners and small businesses will be maintained to at least 2007 levels, and greater support will be given to people experiencing difficulties with mortgage payments, to help them stay in their homes.

42. For RBS, the Government will take up to £15bn of ordinary shares and £5bn of preference shares.

43. This potentially represents a 63 per cent interest in the bank – in return for which the Government will appoint three independent board members.

44. Again, No bonus will be awarded to any board member this year, and any bonus paid next year will be in stock and linked to long-term growth in the bank.

45. Mortgage and SME business lending availability will be maintained at 2007 levels – to the benefit of people up and down the country.

46. These steps will help put RBS on a stronger footing – to allow it to build on its core retail banking operation.

47. Mr Speaker, these announcements represent a total re-capitalisation of just under £50bn for the eight major banks – in line with my announcement on Wednesday.

48. And as I said then, more capital is available to smaller institutions, should they need it.

49. Mr Speaker, the Government does not want to run Britain’s banks – it wants to rebuild them.

50. The long-term future of UK banks lies in the private sector. We will aim to sell the public share in the participating banks as soon as feasibly possible.