Chancellor makes statement on emergency bank loans

26 November 2009

The Chancellor of the Exchequer, Alistair Darling, made a statement to the Commons on the emergency loans made by the Bank of England to the Royal Bank of Scotland and HBOS in the autumn of 2008.

Mervyn King, Governor of the Bank of England, had told the Treasury Select Committee the previous day about the emergency loans - the first time the information had been made public.

The Chancellor of the Exchequer told the Commons:

"He [the Governor] told the Committee that in most cases confidence can be best sustained if the Bank's support is disclosed only when the conditions have improved to a point where the disclosure itself should not be a cause for disturbance.

"However, he said that, as stated in his report, it is the policy of the Bank that such assistance should be disclosed once the Bank considers that the need for confidentiality has ceased.

"The Governor's judgment is that now that RBS has signed up for the asset protection scheme and Lloyds Banking Group has embarked on its alternative strategy for capital raising, there is no longer a need for the assistance to remain secret and it is now appropriate to disclose details. I agree with his judgment."

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