Download or read book Maintaining the financial stability of UK banks written by Great Britain: National Audit Office and published by The Stationery Office. This book was released on 2010-12-15 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: The scale of the support currently provided to UK banks has fallen from a peak of £955 billion to £512 billion, but the amount of cash currently borrowed by the Government to support banks has risen by £7 billion since December 2009. It is likely the taxpayer will be providing support for years to come. The most likely scenario is that there will be no overall loss on the main guarantees. While the UK banks appear to have survived further external shocks in 2010, investors' perceptions of the risk of investing in UK banks remain as high as the summer of 2008. The Treasury aims for the support schemes to be temporary. However, winding the support down quickly will be challenging and it is likely that the Treasury will be committed to at least some of its guarantees, loans and share investments for years to come. The eventual cost or return to the taxpayer as a result of the Treasury's support of the banks is dependent on the Treasury's successfully disposing of its shares in RBS and Lloyd's and recouping its loans to the banking sector. Meanwhile, the Government is paying £5 billion a year (£10 billion so far) in interest on the Government borrowing required to finance the purchase of shares and loans to banks. So far, this has been offset by the fees and interest received by the Treasury from the supported banks, but these are likely to fall in future.
Download or read book Maintaining financial stability across the UK s banking system written by Great Britain: National Audit Office and published by Stationery Office. This book was released on 2009-12-04 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: The National Audit Office, in this report (HCP 91, session 2009-10, ISBN 9780102963199) has concluded that the public support provided to UK banks by the Treasury was justified, given the scale of the economic and social costs if one or more major banks had collapsed. In providing that support, moreover, the Treasury met two of the government's principal objectives: protecting depositors' money in banks and maintaining the stability of the financial system. The final cost to the taxpayer will not, however, be known for a number of years. The total amount of support the Government provided to the banks reached �850 billion. In consequence there have been no disorderly failures of UK banks and no retail depositor in a bank operating in the UK has lost money. By the end of November 2009, the banking sector as a whole had benefited from improved confidence. But, in 2009-2010, lending to businesses is not likely to meet targets. The Treasury estimated in April 2009 that there may be a loss to the taxpayer of between �20 billion and �50 billion, the wide range reflecting the inevitable uncertainty involved in such an estimate. Total losses will depend on losses from the Asset Protection Scheme and the price at which the government sells its holdings in RBS and Lloyds. The Treasury expects by April 2010 to have spent �107 million on advisers, some of whom had to be employed at short notice. In total, just under �100 million is expected to be refunded by the banks. Two sets of financial advisers - from Credit Suisse and Deutsche Bank respectively - who were each appointed on retainers of �200,000 a month for a year. The contracts included provisions for success fees of up to �5.8 million, payable at the Treasury's discretion. As a condition of the recapitalisation scheme, RBS and Lloyds agreed to targets for retail mortgage lending and business lending: RBS would lend an additional �25 billion in 2009-10, and Lloyds an additional �14 billion. To date, both banks are on track to meet their retail mortgage lending commitments but lending to businesses is likely to fall short of the targets. The Treasury is monitoring progress and meets each of the banks regularly. The only formal sanction available if targets are not met is a potential refusal to extend guarantees for wholesale borrowing under the Credit Guarantee Scheme.
Download or read book Maintaining financial stability across the United Kingdom s banking system written by Great Britain: Parliament: House of Commons: Public Accounts Committee and published by The Stationery Office. This book was released on 2010-02-09 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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. 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. But 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.
Download or read book Maintaining Financial Stability Across the United Kingdom s Banking System written by Great Britain. Parliament House of Commons. Committee of Public Accounts and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book HM Treasury written by Great Britain. National Audit Office and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Maintaining financial stability of UK banks written by Great Britain: Parliament: House of Commons: Committee of Public Accounts and published by The Stationery Office. This book was released on 2011-04-20 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report examines the progress on repaying taxpayer support and maintenance of financial stability following action taken in the 2007 crisis in the financial markets. Action included nationalisation, the purchase of a large number of shares in RBS and Lloyds, establishing sector-wide schemes to guarantee banks' debt-funding and protect their assets, and indemnifying the Bank of England against losses for providing temporary liquidity. The level of explicit support has gone down from nearly £1 trillion to £512 billion, and estimates of the size of the implicit subsidy vary - from as high as £100 billion to just below £10 billion in 2009 alone. The explicit subsidy includes the fees paid by banks for their use of the Credit Guarantee Scheme which, to date, have been at least £1 billion less than the benefit received by the banks. These subsidies enable private gains to be made at the expense of public risk, and some of these gains have been used to pay bonuses to staff and dividends to shareholders, rather than enhancing the financial sustainability of the sector. This causes the Committee and the wider public much concern. For the taxpayer to obtain value for money from exiting from the support depends heavily on a successful sale of the shares in RBS and Lloyds. The government shareholding is far greater than in previous share sales and will require extraordinarily careful handling to protect the taxpayers' interest. Regulatory and political uncertainty over the banking sector will remain until the Government has responded to the recommendations from the Independent Commission on Banking.
Download or read book The UK Banking System and its Regulatory and Supervisory Framework written by C. Gola and published by Springer. This book was released on 2015-12-11 with total page 241 pages. Available in PDF, EPUB and Kindle. Book excerpt: An account of the principal phases in the development of the English banking system, and an analysis of the financial structure of the economy of the UK. The book focuses in detail on the regulatory and supervisory aspects of the UK banking system, and the interactions between the structural aspects of the banking and supervisory system.
Download or read book Financial Stability and Depositor Protection written by Great Britain. Treasury and published by The Stationery Office. This book was released on 2008 with total page 172 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is a further consultation paper on financial stability and depositor protection in the UK (Cm.7436, ISBN 9780101743624), and follows on from an earlier consultation document published in January (Cm. 7308, ISBN 9780101730822). The Command Paper published in January summarised the actions being taken by the Treasury, the Financial Services Authority and the Bank of England in response to the disruption being experienced in the global financial markets. Five key objectives were set out: (1) Stregthening the stability and reliance of the financial system; (2) Reducing the likelihood of individual banks facing difficulties; (3) Reducing the impact, when banks do experience difficulties; (4) Providing effective compensation arrangements; (5) Strengthening the Bank of England. A full summary of the proposals to meet the above objectives is set out in the first chapter of this follow-up consultation, with the remainder of the document examining the January proposals in detail.
Download or read book Banking Crisis written by Great Britain. Parliament. House of Commons. Treasury Committee and published by The Stationery Office. This book was released on 2009 with total page 136 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report examines the failure of the UK banks. The Committee begins by examining how the present position came about. After looking at the economic situation the report addresses the fate of those banks now partly or wholly owned by the Government, comparing their experiences with those of the building societies. This analysis identifies several key factors as triggering this crisis. First, the growth of risk and complexity, with a concomitant growth in profit, meant that too few people (including many of those in charge) had a clear idea of what was on the banks' books. Second, the banking sector became over-reliant on wholesale funding and discounted any possibility that the wholesale market would dry up; third, rapid growth in the sector was facilitated by increased leverage. The Committee praises the response of the Financial Services Compensation Scheme which had to cope with a dramatic surge in its workload to help compensate those savers in failing institutions. The package of measures the Government has taken to address the problems in the banking sector is then examined and the Committee offers its initial view on these measures. The Government's multi-billion pound stake in the banking sector is being managed by UK Financial Investments Limited (UKFI) and the next section looks at its early work. Finally the report looks at the future of the banking sector, to see if structurally steps can be taken to limit the possibility of another banking crisis.
Download or read book Financial Stability in a Changing Environment written by Zenta Nakajima and published by Springer. This book was released on 2016-07-27 with total page 540 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this book prominent academics and central bankers explore the framework for securing financial stability in a changing environment. The papers focus in particular on the following crucial issues for central banks and regulatory institutions around the world: (i) the implications of recent changes in the financial system worldwide for financial stability; (ii) an optimal design of prudential policy; and (iii) the relationship between the two ultimate goals of central banks - price stability and financial stability.
Download or read book The Central Bank and the Financial System written by Charles Albert Eric Goodhart and published by MIT Press. This book was released on 1995 with total page 560 pages. Available in PDF, EPUB and Kindle. Book excerpt: As economic advisor to the Bank of England for many years, C. A. E. Goodhart is uniquely positioned to assess the role of the central bank in the modern financial system. This book brings together twenty-one of his previously published articles dealing with the changing functions of central banks over time, recent efforts to maintain price stability, and debates over specific financial regulation proposals in the UK. Although the current day-to-day operations of central banks are subject to continuous comment and frequent criticism, their structural role within the economic system as a whole has generally been accepted without much question, despite several attempts by economists in recent decades to challenge the value of the institution. C. A. E. Goodhart brings his knowledge of both the theoretical arguments and the actual working of central banks to bear in these essays. Part I looks at the general purposes and functions of central banks within the financial system and their evolution over time. Part II concentrates on the current objectives and operations of central banks, and the maintenance of price stability in particular. Part III analyzes the broader issues of financial regulation.
Download or read book Some New Directions for Financial Stability written by Charles Albert Eric Goodhart and published by . This book was released on 2004 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Global Financial Stability Report April 2012 written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2012-04-18 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt: The April 2012 Global Financial Stability Report assesses changes in risks to financial stability over the past six months, focusing on sovereign vulnerabilities, risks stemming from private sector deleveraging, and assessing the continued resilience of emerging markets. The report probes the implications of recent reforms in the financial system for market perception of safe assets, and investigates the growing public and private costs of increased longevity risk from aging populations.
Download or read book Financial stability and depositor protection written by Bank of England and published by The Stationery Office. This book was released on 2008-01-30 with total page 164 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent months have seen a period of sustained turbulence and instability in global financial markets, with financial firms across the world affected. In Britain, the Northern Rock bank experienced a run on its deposits. The Government announced a review of the existing supervisory regime, including complex areas such as the legal framework for dealing with banks facing difficulties. This consultation document sets out the views of the Government, the Financial Services Authority (FSA) and the Bank of England, responding to a discussion paper "Banking reform - protecting depositors" (HM Treasury, October 2007, http://www.hm-treasury.gov.uk/media/6/3/consult_bankingreform111007.pdf). This paper also takes into consideration the Treasury Committee's report "The run on the Rock" (5th report session 2007-08, HC 56-I, ISBN 9780215038388). The Government proposes to bring forward legislation to address five key objectives: (1) strengthening the financial system - better risk and liquidity management by banks, and improvements in valuation and credit rating agencies; (2) reducing the likelihood of banks failing - strengthening the supervisory framework and changing framework for provision and disclosure of liquidity assistance; (3) reducing the impact of failing banks - a range of tools to resolve a failing bank, including accelerated transfer of business to a healthy bank, a "bridge bank", and a bespoke banking insolvency procedure; (4) effective compensation arrangements in which consumers have confidence - a potential increase to the compensation limit for deposits, changes to enable the Financial Services Compensation Scheme to make payments within one week of a bank failing; (5) strengthening the Bank of England and improving co-ordination between authorities - retaining the tripartite regime, but giving a statutory basis for the Bank of England's financial stability role, and ensuring better governance arrangement within the Bank, and improving international co-ordination regarding financial stability issues and early warnings on global financial risks.
Download or read book Banking Reform written by Great Britain. Treasury and published by The Stationery Office. This book was released on 2013-02-04 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: Banking reform is the second key pillar of the Government's programme for reform of the financial sector to address the weaknesses exposed by the financial crisis of 2007-09. The first pillar of this programme, reform of financial services regulation, has been legislated in the Financial Services Act that received Royal Assent in December 2012 (2012 Ch. 21, 9780105421122). The Government is now legislating to reform the structure of the UK banking system, through the Financial Services (Banking Reform) Bill (HCB 130, session 2012-13, ISBN 9780215053794) which implements key recommendations of the Independent Commission on Banking, including ring-fencing retail deposits from wholesale banking activities and depositor preference. This document accompanies introduction of the Bill and includes the Government response to the first report of the Parliamentary Commission on Banking Standards (PCBS), which conducted pre-legislative scrutiny on the draft Bill. The response explains where the Government has amended the Bill and includes and impact assessment for the Bill, along with the opinion of the independent Regulatory Policy Committee
Download or read book Independent Commission on Banking final report written by Independent Commission on Banking and published by The Stationery Office. This book was released on 2011-09-13 with total page 364 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Independent Commission on Banking's final recommendations aim to create a more stable and competitive basis for UK banking for the long term. The result would be a banking system that is much less likely to cause, or succumb to, financial crises and the huge costs they bring; is self-reliant, so that the taxpayer does not have to bear the losses that banks make; and is effective and efficient at providing the basic banking services of safeguarding retail deposits, operating secure payments systems, and efficiently channelling savings to productive investments in the economy. Stability is crucial and UK banks should have more equity capital and loss-absorbing debt - beyond what has so far been internationally agreed - and their retail banking activities should be structurally separated, by a ring-fence, from wholesale and investment banking activities. The Commission also address competition, which has not been properly effective in UK retail banking. They recommend a seamless switching system based on redirection for personal and small business current accounts, free of cost and risk, complemented by measures to enhance transparency. The new Financial Conduct Authority should have a clear duty to promote effective competition. Structural reform should be complete by the Basel implementation date of 2019 at the latest. These reforms would result in better-capitalised, less leveraged banking more focused on the needs of savers and borrowers in the domestic economy. At the same time UK banks would be free to flourish in global markets, but without UK taxpayer support.
Download or read book Maintaining Financial Stability in Times of Risk and Uncertainty written by Behl, Abhishek and published by IGI Global. This book was released on 2018-12-04 with total page 377 pages. Available in PDF, EPUB and Kindle. Book excerpt: Risks and uncertainties?market, financial, operational, social, humanitarian, environmental, and institutional?are the inherent realities of the modern world. Stock market crashes, demonetization of currency, and climate change constitute just a few examples that can adversely impact financial institutions across the globe. To mitigate these risks and avoid a financial crisis, a better understanding of how the economy responds to uncertainties is needed. Maintaining Financial Stability in Times of Risk and Uncertainty is an essential reference source that discusses how risks and uncertainties affect the financial stability and security of individuals and institutions, as well as probable solutions to mitigate risk and achieve financial resilience under uncertainty. Featuring research on topics such as financial fraud, insurance ombudsman, and Knightian uncertainty, this book is developed for researchers, academicians, policymakers, students, and scholars.
