October 7, 2008 (LPAC)--Three of Great Britain's largest banks--the Royal Bank of Scotland, Barclays and Lloyds--reportedly held late night meetings on Monday night with Chancellor of the Exchequer Alistair Darling and Bank of England Governor Mervyn King, to cobble together a giant government bail-out package to prevent the banks from going under. Although Darling would not confirm the meeting, saying coyly "It would be irresponsible to speculate on the specifics of future responses"--the only known case where Darling has opposed speculation--the discussions reportedly did occur, and they centered on a $79 billion government bailout.

Part of the problem is that country's top six banks have $95 billion in paper coming due by March 2009, which is three times as much as the same period last year, and of course nobody is lending to anybody these days. Of this amount, $28 billion is owed by Barclays, and another $20 billion is owed by RBS, which is the Queen's own piggy bank.

The markets were not comforted, however, by the assurances delivered by Barclays CEO John Varley, who said today: "We have our feet on the ground." The banker gave no further indication, however, about the location of his head.