Secret Loans to RBS and HBOS Revealed
With everything that has happened through the financial crisis, today’s revelations that secret loans were granted to RBS and HBOS are unlikely to raise many eyebrows. The Bank of England has revealed for the first time that it lent £61.6bn propping up RBS and HBOS in the height of the global financial crisis last autumn. Governor Mervyn King detailed the emergency loans, which it made in its role as “lender of last resort” in a submission to the Treasury select committee. …
With everything that has happened through the financial crisis, today’s revelations that secret loans were granted to RBS and HBOS are unlikely to raise many eyebrows.
The Bank of England has revealed for the first time that it lent £61.6bn propping up RBS and HBOS in the height of the global financial crisis last autumn. Governor Mervyn King detailed the emergency loans, which it made in its role as “lender of last resort” in a submission to the Treasury select committee. The fee for the loans was 1.7 percentage points over the usual lending rate and the last of the money was repaid by January of this year.
Whilst most people might sigh at this news, Lloyds shareholders who were being asked to approve the takeover of HBOS but were not told about the Northern Rock-style cash bailout of HBOS at that time will surely note the significance. Especially on the day that Lloyds are launching a record rights issue to raise £13.5bn to avoid taking part in the government’s Asset Protection Scheme.
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