The Treasury has announced a package of measures intended to tackle current financial market difficulty.

In an effort to ensure there is "sufficient liquidity" in the banking system, £200 billion is being made available to financial institutions as part of the Special Liquidity Scheme.

Additionally, the government is to make further capital available to a number of "eligible" organisations, such as UK incorporated banks.

Governor of the Bank of England Mervyn King claimed the recapitalisation of the UK's banking system is necessary to improve confidence within the financial system.

The steps taken by the Bank of England go some way to "resolving the present crisis", he added.

Michael Coogan, director-general of the Council of Mortgage Lenders, said the move appeared to be a "decisive" and "reasonable" set of measures aimed at supporting "market stability".

"The flow of funding to support mortgage lending has been severely constrained, and these measures will help to create more positive conditions for the mortgage market," he remarked.