BoE's King plotted bailout of global banks in March '08

Bank governor Mervyn King plotted a secret bailout of the world banking system using funds from four cash-rich nations, including the UK, in March 2008, according to a US embassy cable released by WikiLeaks.

Six months before the world financial crisis reached its peak, forcing taxpayers to rescue collapsing financial institutions, King told US officials in London that the UK, US, Switzerland and Japan could jointly enable a multibillion-pound cash injection into global banks, the Guardian reports.

The plan would override the "dysfunctional" G7 nations, King said.

According to the cable, King told US ambassador to Britain Robert Tuttle and the treasury deputy secretary Robert Kimitt that there needed to be a "coordinated effort to possibly recapitalise the global banking system".

The plan would also be a way to rid the banks of the toxic loans on their balance sheets.

In the cable dated March 2008, the ambassador says King's proposals "were not casual ideas developed in the course of a luncheon conversation.

"It was clear that his principal objective in the meeting was to outline his outside-the-box thinking for Kimmitt."