The Government announced that it is to inject up to £37 billion of taxpayers' money into the Royal Bank of Scotland (RBS), Lloyds TSB and HBOS. HM Treasury money forms part of the rescue plan announced last week.
As a condition of the investment the Government has insisted that senior directors should get no cash bonuses this year, with future bonuses to be paid in the form of shares.
Regional Minister, Nick Brown said "These are unprecedented times, and the Government has acted decisively now to support the affected banks so that homeowners can access competitive mortgages and small businesses can get loans at the same levels as in 2007.
"Our priority is financial stability and everyone depends on an efficient and fully-functioning banking system. Yesterday's announcement will also help people struggling with their mortgages to stay in their homes.
"I convened a meeting of North East business leaders on Friday who warmly endorsed the Government's plan and highlighted a number of practical measures that we could take forward in the region – with government and business working together.
"The North East is one of the country's fastest-growing regions and the Government's decisive action is aimed at stabilising the economy so that we can build on what has already been achieved."
Further to yesterday's announcement, the Government will agree with the boards of banks the appointments of new non-executives directors and, where necessary, restrict the potential to reward failure.
