Sandy Chen, banking analyst, Panmure Gordon:

"The obvious question is: will all this money turn things around? We think there is a high risk that it will not. The loan guarantee-insurance programmes could cost taxpayers far more than anticipated; banks could be dragged through a creeping nationalisation that severely dilutes existing shareholders. None of it will achieve the desired result, which we assume is to lay a firm foundation for economic recovery. The loan guarantee programme would work if the economy quickly turned out to be better than expected, but things seem to be going in the opposite direction. Defaults will rise faster than expected, and losses will be bigger than expected."

Magnus Mathewson, equities analyst, Hichens, Harrison:

"I don't think this will work. It's throwing money at something rather than dealing with the actual problem, which is liquidity. There should be an explicit state guarantee on deposits. I think there will be a reluctance with investors to put money in UK banks for years to come, which is massively destructive to the sector."

Robert Law, equities analyst, Lehman Brothers:

"We would regard it as positive at the margin, but it does not change the key issue of the unknown and potentially unlimited losses of the banking system, and therefore whether it will ultimately require further capital injections. We therefore remain negative on the British banks and prefer those in the Far East and Switzerland. RBS's statement shows the effects of the downturn on credit quality which has negative implications for other names, especially Lloyds, in our view."

Marc Ostwald, analyst, Monument Securities:

"This makes the Bank of England the UK's 'bad bank', even if there are some limits to the risk that is being transferred."