Public 'must be told bank risks'

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The full risks to taxpayers from bank nationalisations and bail-outs should be "comprehensively disclosed" to the public, MPs have said.

The Commons Treasury sub-committee said the government had failed to reveal its "significant liabilities" in full.

Accounting for nationalised and part-nationalised banks must be at least as good as for those in the private sector, it added.

The MPs also urged the Treasury to stop shedding staff during the downturn.

The government nationalised Northern Rock and Bradford and Bingley last year, and put £37bn of capital into Royal Bank of Scotland (RBS), Lloyds TSB and HBOS.

This week, it was announced that banks would be able to take up state insurance against their expected bad debts, while the government said it was increasing its stake in RBS from 58% to nearly 70% .

Quarterly data

In its report, the committee said: "In order for public scrutiny to be effectively performed, the magnitude and nature of these liabilities must be comprehensively disclosed."

The accounts for fully and part-nationalised banks should be "at least as comprehensive as those made by major banks", and go beyond minimum accounting standards, it suggested.

Key performance indicators for Northern Rock and Bradford and Bingley should also be included in Treasury accounts, the committee said.

The committee's chairman, Conservative MP Michael Fallon, said: "Public companies are required to publish quarterly data on their accounts and, given the scale of public investment, the taxpayer deserves no less information from the Treasury."

The MPs also called for a halt to job cuts at the Treasury and its agencies, warning that it risked being overstretched by the massive workload resulting from the present economic crisis.