Since the government's credit guarantee scheme (CGS) was launched last year, it has become the primary source of long term funding for UK banks. As the latest Bank of England quarterly bulletin puts it "nearly all senior debt issued by UK banks since the previous (BoE) Bulletin made use of the UK Credit Guarantee Scheme".
Where we are heading? Billions of pounds of government guarantees are being used to prop up a failed financial system. What is the exit strategy from this unprecedented fiscal support?
Exit strategy? There isn't one.