The National Audit Office (NAO) says that ministers failed to conduct the necessary “breadth and depth of analysis” on the banks.
The watchdog’s report also finds the asset protection scheme (APS) did not go far enough to achieve its goal of bolstering lending to businesses but concedes it was successful in allowing the Treasury to maintain financial stability, reports the Guardian.
The APS was originally intended as a backstop for troubled loans by Royal Bank of Scotland and Lloyds Banking Group. When it was finally announced in the autumn of 2009 only RBS participated.
Lloyds paid £2.5bn to exit the scheme but the NAO reckoned it could have been required to pay between £3bn and £4.5bn for the insurance it received before conducting a cash call on shareholders that allowed it to survive without extra government assistance.
RBS will face a bill of £2.5bn when it exits although the NAO calculated this could have been set as high as £4.4bn.
Pimco says ‘untenable’ policies will lead to eurozone break-up
Pimco, the world’s largest bond fund, has called on Greece, Ireland and Portugal to step outside the eurozone temporarily and restructure their debts unless the currency bloc agrees to a radical change of course.
Andrew Bosomworth, head of Pimco’s portfolio management in Europe, said current policies are untenable in the absence of fiscal union and will lead to a break-up of the euro.
“Greece, Ireland and Portugal cannot get back on their feet without either their own currency or large transfer payments,” he told German newspaper Die Welt.
He said these countries could rejoin EMU “after an appropriate debt restructuring”, adding that devaluation would let them export their way back to health.
Gartmore may lose half of 350-strong workforce in takeover
More than half of Gartmore’s 350 staff are set to lose their jobs if the cut-price takeover by Henderson Group goes ahead, according to the Daily Mail.
Investors will also be left out in the cold this Christmas – a 95p a share offer is likely to be the best they can get and even this price could be ratcheted downwards.
Gartmore, which floated in December 2009 for 220p a share, is desperately trying to sew up a deal with Henderson before the festive holiday. FULL STORY…
