Mortgage News
Treasury slammed for secrecy on bail-out
The Committee of Public Accounts has criticised the Treasury for secrecy over the loans provided by the Bank of England to Royal Bank of Scotland (RBS) and Halifax Bank of Scotland (HBOS).
In order to reduce the risk of leaks, the Treasury, which authorised the £18bn in emergency assistance and indemnity to HBOS and RBS in October 2008, did not inform Parliament of this support until November 2009.
A report from the Committee explained: “In future, and only in very exceptional circumstances, when highly sensitive matters need to be disclosed, as a minimum we expect departments to provide the Chairman of this Committee with a full oral briefing.”
Committee member, Sir Nicholas Macpherson, also reiterated that the Treasury would ensure greater competition in the banking market by taking a hard line on state-aided banks such as Northern Rock.
His comments led to speculation that the 100% deposit savings guarantee for Northern Rock customers would be removed in March when the bank announces its results.
Linda Will, intermediary sales manager at In The Loop Mortgages, said a cut to the Northern Rock deposit savings account in March would be welcome news for the market.
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She added: “Northern Rock has been competing on an uneven playing field for too long and there is no rationale for preserving it any longer. However, I believe that the criticism about RBS and HBOS is harsh, because there may have been a run on those banks and the consequences would have been far worse.”