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Banks

Volume 488: debated on Tuesday 24 February 2009

To ask the Chancellor of the Exchequer what proportion of the (a) domestic assets and (b) foreign assets of (i) the UK banks in which UK Financial Investments has taken a significant stake and (ii) the regulated banking sector are non-performing. (255384)

UK Financial Investments Limited (UKFI), which is wholly owned by the Government, manages the Government's investments in the recapitalised banks but ownership of the shares of the recapitalised banks still lies with HM Treasury. Neither HM Treasury nor UKFI collect or hold such information relating to non-performance of assets. However, information on non-performing assets is reported by each bank in their annual accounts.

To ask the Chancellor of the Exchequer who he has appointed as members to the independent review of the corporate performance of the UK banking industry; on what basis he appointed Sir David Walker as Chair of the review; when he expects the review to report; and if he will make a statement. (256723)

The Chancellor of the Exchequer has appointed Sir David Walker to conduct a review of corporate governance of UK banks.

The review will examine board management of risk (including the effectiveness of risk and audit committees), incentives to manage risk in bank remuneration policies, the competences needed on bank boards, board practices and structures, and the role played by institutional shareholders.

As a former regulator, director and banker, Sir David has a strong understanding of the issues of corporate governance, board practices, financial markets and relationships with institutional shareholders.

The review will report jointly to the Chancellor of the Exchequer, the Secretary of State for Business, Enterprise and Regulatory Reform and the Financial Services Secretary to the Treasury with preliminary conclusions by the autumn and final recommendations by the end of the year.

To ask the Chancellor of the Exchequer what assessment he has made of the prospects for the banking industry in the next 12 months; and if he will make a statement. (256891)

The comprehensive package announced last October was designed to ensure the stability of the financial system and to protect ordinary savers, depositors., businesses and borrowers. The action we took including the recapitalisation scheme prevented the collapse of the banking system.

On 19 January 2009 the Government announced further measures designed to reinforce the financial system, to increase confidence and capacity to lend, and in turn to support the recovery of the economy. The tripartite authorities are now working on the implementation of these measures and will monitor the impact of these schemes. The Government will publish further details of the asset protection scheme shortly.