In order to ensure the stability of the financial system and to protect ordinary savers, depositors, businesses and borrowers, the Government took decisive action last October.
Under the recapitalisation scheme announced on 8 October 2008, the Government invested £19.97 billion in RBS and £16.96 billion in Lloyds TSB/HBOS. These banks are also eligible to use the Government's credit guarantee scheme (CGS), under which up to £250 billion of bank lending will be guaranteed. Participating banks have accessed some £100 billion of funding under the CGS so far. Figures for individual banks are confidential.
As part of its investment, the Government have agreed with the banks supported by the recapitalisation scheme a range of commitments. Details are available at www.hm-treasury.gov.uk/press_105_08.htm.
These include agreements to make available affordable products during this period of global turbulence in financial markets, help individuals struggling with their mortgage payments stay in their homes and support the expansion of financial capability initiatives.
UK Financial Investments Limited (UKFI) will oversee the conditions attached to subscribing to the Government's recapitalisation fund, including maintaining, over the next three years, the availability and active marketing of competitively-priced lending to home owners and small businesses at 2007 levels.
In the Pre-Budget Report the Government also established a new lending panel to monitor lending, bringing together lenders, trade bodies, consumer groups and Government, regulators and the Bank of England. This provides a forum through which Government and lenders can consider issues of mutual interest.
On 19 January the Government announced further 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. Details are available at www.hm-treasury. gov.uk/press_05_09.htm.