Morning:
6°c
Alistair Darling defends decision to keep bank loan secret
25 Nov 2009Chancellor Alistair Darling today defended his decision to keep secret an emergency £61.6 billion loan made by the Bank of England to Royal Bank of Scotland (RBS) and HBOS.
If the loan had been made public it could have "seriously jeopardised" the stability of the entire UK financial system, he said.
Because of this fear, he decided any disclosure of the loan was "not in the public interest".
Mr Darling's justification for keeping the loan secret comes ahead of an emergency statement to the Commons later today.
Ministers will explain to MPs the situation which saw the Bank of England forced to lend the money at the height of the financial crisis in October last year.
Yesterday Bank of England Governor Mervyn King told MPs on the Treasury Select Committee the Bank stepped in as a lender of last resort just weeks after the collapse of Lehman Brothers to buy time until the Government could take action.
In a written ministerial statement today Mr Darling said: "The Bank's assessment at that time was that it was vital that their emergency liquidity assistance operations remained confidential, and that any disclosure or leak of the operations would seriously jeopardise the financial stability of the system as a whole. I shared this assessment."
Reader views (4)
Anyone with a clue about the way markets work will realise that keeping the loan secret was the only choice for the government at the time.
- Vinny, London UK, 05/01/2010 00:38
Report abuse
Were the Lloyds shareholders made aware of this facility when they were asked to support the HBOS merger? I do not think so and if they had of been would they have voted for the merger .I for one would not have voted in favour,and like thousands of others have seen a very good bank brought to its knees by government sleaze and downright dishonesty
- Brouillac, Grezels, France, 02/12/2009 00:15
Report abuse
And before long all government decisions will be kept secret for the good of the nation/people/market/security etc.
At which point, we can switch off the lights and leave.
- Nobby Clark, Perth, the Scottish one, 25/11/2009 15:40
Report abuse
Now come clean about the gold/tungsten scam or are these connected.
- Alspain, manilva spain, 25/11/2009 13:00
Report abuse
