Differences in Rescue Plans of US and UK

As I have been writting earlier, two major countries in the Financial markets: US and UK have applied their rescue plans for financial systems. In US it is Paulson's rescue plan which in general suggest US Treasury buying stakes in nine largest banks , where as in UK it is Brown's £37bn bail-out. As it has been stated by Financial Times, that the US plan is much more generouse than UK's one. It has also been argued that Paulson's plan is very similar to British ,which was announced last week. However, there are significant differences in these two plans. The first and the most crucial difference is that US authorities are kinder to banks than UK ones, in such a way that US preference shares being bought in US pay a 5 per cent dividend, which will rise approximately to 9 per cent after five years. On the other hand, UK's shares will pay at 12 per cent and participating banks will not be able to pay dividends, unlike in US.

Moreover, UK scheme mostly deals with banking system, where as, US is helping financial firms outside the conventioanl banking sector.

Therefore, looking at these differences, one can conclude that US's scheme is more effective, but there are still arguments as both plans have been critisized.