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| UK banking bail-out 'justified' | |
| (about 2 hours later) | |
| The Treasury was "justified" in using taxpayers' money to bail out banks to protect the wider financial system, according to a report. | The Treasury was "justified" in using taxpayers' money to bail out banks to protect the wider financial system, according to a report. |
| The National Audit Office (NAO) review says the cost to the British public so far totals £850bn. | The National Audit Office (NAO) review says the cost to the British public so far totals £850bn. |
| However, it says that the final cost to the taxpayer will not be known for a number of years. | However, it says that the final cost to the taxpayer will not be known for a number of years. |
| The NAO study also shows that by April 2010, the Treasury will have spent £107m on crisis advisers. | The NAO study also shows that by April 2010, the Treasury will have spent £107m on crisis advisers. |
| "Restore confidence" | "Restore confidence" |
| According to the report, Credit Suisse could earn as much as £15.4m in fees for its crisis advice. | According to the report, Credit Suisse could earn as much as £15.4m in fees for its crisis advice. |
| Deutsche Bank also provided advisers who were appointed on retainers of £200,000 a month for a year. | Deutsche Bank also provided advisers who were appointed on retainers of £200,000 a month for a year. |
| These banks should understand that with the level of state support they have received, they must be run in the public interest Vince Cable, Liberal Democrats | These banks should understand that with the level of state support they have received, they must be run in the public interest Vince Cable, Liberal Democrats |
| "The Treasury was justified in using taxpayers' money to safeguard savings and stabilise and restore confidence in the financial system," said Amyas Morse, head of the National Audit Office. | |
| "It is difficult to imagine the scale of the consequences for the economy and society if major banks had been allowed to collapse." | "It is difficult to imagine the scale of the consequences for the economy and society if major banks had been allowed to collapse." |
| "As the crisis begins to subside, lessons must start to be learned. The authorities need to put formal arrangements in place to evaluate the effectiveness of the support provided to banks in order to inform future policy makers," he continued. | "As the crisis begins to subside, lessons must start to be learned. The authorities need to put formal arrangements in place to evaluate the effectiveness of the support provided to banks in order to inform future policy makers," he continued. |
| "Sheer scale" | "Sheer scale" |
| Responding to the report, Liberal Democrat Treasury spokesman Vince Cable said it should act as a wake-up call to the banks involved. | Responding to the report, Liberal Democrat Treasury spokesman Vince Cable said it should act as a wake-up call to the banks involved. |
| "This report shows the sheer scale of the debt that banks owe, both directly and indirectly, to the taxpayer. These banks should understand that with the level of state support they have received, they must be run in the public interest." | "This report shows the sheer scale of the debt that banks owe, both directly and indirectly, to the taxpayer. These banks should understand that with the level of state support they have received, they must be run in the public interest." |
| Edward Leigh, the conservative chairman of the Public Accounts Committee, says the government played "fast and loose" with parliamentary rules by its decision to keep secret for 13 months the huge emergency loans made to Royal Bank of Scotland and HBOS, made just over a year ago. | |
| He described the explanation - that revealing the arrangement sooner could have damaged confidence - as "feeble". | He described the explanation - that revealing the arrangement sooner could have damaged confidence - as "feeble". |
| Treasury support | Treasury support |
| In addition to the support given to Northern Rock, the Treasury has: | In addition to the support given to Northern Rock, the Treasury has: |
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