Maintaining Financial Stability Across the United Kingdom's Banking System
HC 190, Twelfth Report of Session 2009-10 – Report, Together with Formal Minutes, Oral and Written Evidence
- House of Commons – Committee of Public Accounts
- TSO (The Stationery Office)
In 2007, financial institutions across the world began to encounter difficulties raising the funds needed to keep their operations going, leading to a crisis of confidence in the banking system. In response, governments have intervened to support the financial system. The complexity of the problems across the financial sector and the speed with which events unfolded presented the Treasury and the other Tripartite Authorities with a formidable challenge reports 'Maintaining Financial Stability Across the United Kingdom's Banking System (HC 190)'
There have been no disorderly failures of UK banks, and no retail depositor in a bank operating in the UK has lost money. To date a range of indicators, including benchmark interest rates for wholesale funding, bank share prices and the perceived risk of defaults, have stabilised and improved. However, the scale of the support required from the UK taxpayer to maintain financial stability, totalling around £850 billion, has been truly staggering.
In responding to the crisis the Treasury was heavily reliant on the use of external advisers, and the terms allowed for the potential payment of success fees in situations where no success criteria were specified, a practice wholly inappropriate in the public sector. Lending to business, vital to the recovery of the economy, is falling short of legally-binding commitments entered into by two of the banks that received the most support: the Royal Bank of Scotland (RBS) and Lloyds Banking Group. The priority now is to get the best value for the taxpayer from the huge sums of public money invested in the banks.
|Format||Paperback||Published||09 Feb 2010|
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