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Banks: Finance

Volume 494: debated on Wednesday 17 June 2009

To ask the Chancellor of the Exchequer what the expected exposure range for bad debt is in relation to the Asset Protection Scheme. (279978)

As announced on 26 February, the Royal Bank of Scotland Group (RBS) agreed in principle to protect £325 billion of assets in the Asset Protection Scheme; and on 7 March Lloyds Banking Group (Lloyds) agreed in principle to protect £260 billion of assets in the scheme. After the deduction of the first loss (£42.2 billion and £35.2 billion respectively) that falls to the participating banks, the Treasury will guarantee 90 per cent. of the remaining value (at 31 December 2008) of the covered assets.

The Treasury and its advisers are continuing to work with participating banks to conduct due diligence on the assets intended for inclusion in the scheme.

Further detailed information will be provided after the final contracts are signed.

To ask the Chancellor of the Exchequer what recent progress has been made in the implementation of the Asset Protection Scheme; and if he will make a statement. (279979)

The Treasury and its advisers are continuing to work with the participating banks to reach a final agreement on the terms and conditions of the Asset Protection Scheme (APS) and to conduct due diligence on the assets intended for inclusion in the scheme.

The Government are in the process of recruiting a chief executive to run the new agency, the Asset Protection Agency, at arms length from the day-to-day business of the Treasury, and administer the APS on the taxpayer's behalf.

Further detailed information will be provided after the final contracts are signed.