The Bank of England Governor Sir Mervyn King was quoted as saying by The Telegraph, "This is the most serious financial crisis we’ve seen, at least since the 1930s, if not ever. We have to deal with very unusual circumstances, but to act calmly to this and to do the right thing."

Under the proposed Quantitative Easing (QE), the Bank creates new electronic money, which is further invested in buying government bonds, gilts from the banks. Further on, the banks then use the cash they gain to increase their lending to businesses and individuals. QE is a tool that's not used often. It's part of monetary policy used by central banks of countries to kick start growth in the economy when the more traditional monetary policy measure are no longer effective. As part of QE, a central bank purchases financial assets to inject a pre-decided amount of money into the economy.