To ask Her Majesty's Government whether they will ensure that ordinary shareholders in banks where the taxpayer has a substantial interest are given a return on their investment to restore confidence in such banks as proper places in which to invest in future.[HL5820]
The actions taken by the Government for the banking sector have been designed to ensure that financial stability is maintained and that confidence is restored to the financial system, while properly safeguarding the interests of taxpayers.
At the same time, the Government have been careful, in all cases, to respect the proper rights of shareholders. Shareholders formally approved the stakes that the Government took in the Royal Bank of Scotland and Lloyds Banking Group. The participation of those banks in the asset protection scheme will similarly be subject to shareholder approval. And in other interventions such as Northern Rock and Bradford & Bingley, we have put in place a mechanism that will see former shareholders receive proper compensation for their shares—as assessed by an independent valuer.
The Government will continue to give proper regard to the rights of shareholders. Indeed, shareholders now have a statutory right to independently assessed compensation if the Government should intervene using any of the special resolution powers available under the Banking Act 2009.