To ask the Chancellor of the Exchequer with reference to his Department’s press notice of 19 January 2009 on the Asset Protection Scheme, how performance against commitments to make loans to creditworthy institutions will be monitored; and what mechanisms will be used to report on such performance. (264422)

To ask the Chancellor of the Exchequer pursuant to the Answer of 11 March 2009, Official Report, column 417W, on business: credit, when negotiations with participating banks began; whether the specific and quantified lending commitments will be (a) published and (b) regularly monitored and reported; what the remit of the lending panel is; when it first met; what data it is monitoring; and if he will make a statement. (264706)

On 19 January, the Government announced measures designed to reinforce the stability of the financial system, to increase confidence and capacity to lend, and in turn to support the recovery of the economy. Further information is available at:

http://www.hm-treasury.gov.uk/press_05_09.htm

These build on measures announced on 8 October last year.

The Government are negotiating quantified lending agreements with the banks participating in the Asset Protection Scheme and extended Credit Guarantee Scheme as announced in January this year. The Chancellor of the Exchequer set out in his statement to Parliament on 26 February that Royal Bank of Scotland has agreed lending agreements with the Government. The Financial Secretary to the Treasury set out in his statement to Parliament on 9 March that Lloyds Banking Group has agreed lending agreements with the Government.

The Government will report to Parliament annually on the delivery of these agreements.

As announced in the 2008 pre-Budge report, the Government have established a new lending panel, which will improve monitoring of lending to households and businesses. The remit of the panel is set out in the 2008 pre-Budget report.

To ask the Chancellor of the Exchequer what assessment he has made of the effect of the Asset Purchase Facility on the monetary value of the (a) assets and (b) liabilities of pension funds. (264431)

Asset purchases undertaken by the Bank of England will increase the flow of money within the economy. This will help to revive the flow of credit within the economy, encourage spending and support economic activity. A prosperous and stable economy is vital for pension funds to meet their obligations.

To the extent that asset purchases by the Bank of England lead to movements in bond yields, this will affect the present value of pension funds liabilities, and also the present value of bonds and other assets held by the fund. The overall effect on an individual fund's financial position will depend on how closely the fund's assets and liabilities are matched in terms of their exposure to interest rate risk. This will vary across funds, reflecting differences in the composition of each fund's assets and liabilities.

To ask the Chancellor of the Exchequer pursuant to the answer of 9 March 2009, Official Report, column 100W, on banks, what the Government's principles on remuneration are, apart from the principle of no rewards for failure. (265730)

The Government have set out four basic principles to be applied to remuneration policies:

Rewards for failure are not appropriate.

Bonus payments should be based on long-term sustainable performance.

Bonuses are not just about past performance but are designed to shape future performance and thus should be subject to appropriate claw back.

The regulator is to take bank remuneration policy into account when supervising a bank.

The Government are clear that going forward, remuneration policies must be based on long-term sustainable performance in the interests of shareholders, taking proper account of risk.