Maintaining the financial stability of UK banks: update on the support schemes, HM Treasury
The Stationery Office, Dec 15, 2010 - Business & Economics - 39 pages
The scale of the support currently provided to UK banks has fallen from a peak of £955 billion to £512 billion, but the amount of cash currently borrowed by the Government to support banks has risen by £7 billion since December 2009. It is likely the taxpayer will be providing support for years to come. The most likely scenario is that there will be no overall loss on the main guarantees. While the UK banks appear to have survived further external shocks in 2010, investors' perceptions of the risk of investing in UK banks remain as high as the summer of 2008. The Treasury aims for the support schemes to be temporary. However, winding the support down quickly will be challenging and it is likely that the Treasury will be committed to at least some of its guarantees, loans and share investments for years to come. The eventual cost or return to the taxpayer as a result of the Treasury's support of the banks is dependent on the Treasury's successfully disposing of its shares in RBS and Lloyd's and recouping its loans to the banking sector. Meanwhile, the Government is paying £5 billion a year (£10 billion so far) in interest on the Government borrowing required to finance the purchase of shares and loans to banks. So far, this has been offset by the fees and interest received by the Treasury from the supported banks, but these are likely to fall in future.
What people are saying - Write a review
We haven't found any reviews in the usual places.
117 billion 50 billion Asset Backed Securities Asset Protection Scheme Bank of England Barclays Bradford & Bingley Co-operative Financial Services contingent capital Credit Default Swap Credit Guarantee Scheme customer deposits December Deutsche Telekom divest European Commission Eurozone sovereign debt Figure financial crisis Financial Services Compensation financial stability financing costs HSBC issuance Jul Sep Nov Lloyds Banking Group lnitial Public Offering major UK banks Mar May Jul maturing debt maximum mortgage National Audit Office National Australia Bank Northern Rock Asset Northern Rock pic Offering including retail pence preference shares Quantitative Easing RBS and Lloyds recapitalisation regulatory restructure Rights lssues risk Rock and Bradford Rock Asset Management Santander Secondary Offering including senior debt Services Compensation Scheme share price shares and loans Source sovereign debt crisis Special Liquidity Scheme staff support schemes taxpayer value Tier 1 Capital Treasury Treasury's UK Financial lnvestments wholesale funding whollv-owned banks