Current Issue
As Her Majesty’s (HM) Treasury is proposing new regulations to strengthen UK mortgage borrowers’ protections, transparency elsewhere in the UK financial system is finally arriving nearly a year after government assistance was granted in “secrecy” to major UK banks.
The Bank of England (BoE) this week disclosed the extent of financial assistance given to the Royal Bank of Scotland (RBS) and HBOS last fall under the emergency liquidity assistance (ELA) program.
Details of the government assistance had been kept quiet until now under what BoE considered necessary “secrecy,” according to a BoE statement to HM Treasury.
“In most cases, confidence can best be sustained if the Bank’s support is disclosed only when the conditions that gave rise to potentially systemic disturbance have improved to a point where the disclosure itself should not be a cause of such disturbance,” BoE said.
The total use of BoE’s assistance peaked at £61.6bn (US$102.63bn) on October 17 2008. On an individual basis, the assistance given to RBS peaked at £36.6bn on October 17 and at £25.4bn for HBOS on November 13. RBS repaid the facility by December 16 and HBOS repaid its facility by January 16.
Write to Diana Golobay.
