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 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 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 United Kingdom Financial Sector Assessment Program Financial System Stability Assessment written by International Monetary and published by International Monetary Fund. This book was released on 2022-02-23 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt: The U.K. financial sector is globally systemic, open, and complex. It has weathered the COVID-19 pandemic fittingly, thanks to the post-GFC reforms, a proactive macroprudential stance, and an effective multipronged response to maintain financial stability. Brexit uncertainties are being handled appropriately as the U.K. and EU authorities and the financial industry collaborate to prevent undesirable financial stability outcomes. The endpoint of the pandemic remains unclear, as does the actual impact on the financial system once support measures wane. At this juncture, therefore, financial stability conditions in the United Kingdom are being shaped by three key considerations: (i) the evolving U.K.-EU relationship on financial services; (ii) securing a sustainable and robust post-pandemic economic recovery; and (iii) successfully managing ongoing structural transitions.
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 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 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 Global Financial Stability Report October 2019 written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2019-10-16 with total page 109 pages. Available in PDF, EPUB and Kindle. Book excerpt: The October 2019 Global Financial Stability Report (GFSR) identifies the current key vulnerabilities in the global financial system as the rise in corporate debt burdens, increasing holdings of riskier and more illiquid assets by institutional investors, and growing reliance on external borrowing by emerging and frontier market economies. The report proposes that policymakers mitigate these risks through stricter supervisory and macroprudential oversight of firms, strengthened oversight and disclosure for institutional investors, and the implementation of prudent sovereign debt management practices and frameworks for emerging and frontier market economies.
Download or read book Global Financial Stability Report April 2021 written by International Monetary Fund and published by International Monetary Fund. This book was released on 2021-04-06 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: Extraordinary policy measures have eased financial conditions and supported the economy, helping to contain financial stability risks. Chapter 1 warns that there is a pressing need to act to avoid a legacy of vulnerabilities while avoiding a broad tightening of financial conditions. Actions taken during the pandemic may have unintended consequences such as stretched valuations and rising financial vulnerabilities. The recovery is also expected to be asynchronous and divergent between advanced and emerging market economies. Given large external financing needs, several emerging markets face challenges, especially if a persistent rise in US rates brings about a repricing of risk and tighter financial conditions. The corporate sector in many countries is emerging from the pandemic overindebted, with notable differences depending on firm size and sector. Concerns about the credit quality of hard-hit borrowers and profitability are likely to weigh on the risk appetite of banks. Chapter 2 studies leverage in the nonfinancial private sector before and during the COVID-19 crisis, pointing out that policymakers face a trade-off between boosting growth in the short term by facilitating an easing of financial conditions and containing future downside risks. This trade-off may be amplified by the existing high and rapidly building leverage, increasing downside risks to future growth. The appropriate timing for deployment of macroprudential tools should be country-specific, depending on the pace of recovery, vulnerabilities, and policy tools available. Chapter 3 turns to the impact of the COVID-19 crisis on the commercial real estate sector. While there is little evidence of large price misalignments at the onset of the pandemic, signs of overvaluation have now emerged in some economies. Misalignments in commercial real estate prices, especially if they interact with other vulnerabilities, increase downside risks to future growth due to the possibility of sharp price corrections.
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 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 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.
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 Central Bank Regulation and the Financial Crisis written by Miao Han and published by Palgrave Macmillan. This book was released on 2014-01-14 with total page 319 pages. Available in PDF, EPUB and Kindle. Book excerpt: The respective legal frameworks that control central banks are shaped by whether they are market oriented or government controlled. However such stark distinction between these two categories has been challenged in view of the varying styles of crisis management demonstrated by different central banks during the crisis. This book uses comparative analysis to investigate how the global financial crisis challenged the role played by central banks in maintaining financial stability. Focusing on four central banks including the US Federal Reserve System, the Bank of England, the Bank of Japan and the People's Bank of China, it illustrates the similarities between the banks prior to the crisis, and their similar policy responses in the wake of the crisis. It demonstrates how each operated with varying levels of independence while performing very differently and facing different tasks. The book identifies some central explanatory variables for this behavior, addressing the mismatch of similar risk management solutions and varying outcomes. Central Bank Regulation and The Financial Crisis: A Comparative Analysis explores the legal challenges within central bank regulation presented by the global financial crisis. It emphasizes the importance of, and the limitations involved in, legal order and argue that in spite of integration and globalization, significant differences exist in central banks' approaches to risk management and financial stability.
