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Bail-out not the solution yet – Urquhart Stewart

Seven Investment Management director Justin Urquhart Stewart believes the Government’s £37bn bail-out does not solve the banking crisis in the UK.

Urquhart Stewart says the move marks “the end of the beginning” and that three specific things will need to be done to resolve the crisis.

“Firstly there will need to be capitalisation, then a transfer of assets from bad to good and then finally a flow of cash and liquidity to effectively create an overdraft facility.

“This is like putting dynamite in the log jam to get things moving, we now have to wait for it to start and for Libor to shift. This is a small injection so you cannot even look at equity markets at present as the primary goal is to solve the massive problems in the banking system.”

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