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'Bad bank' still being considered 'Bad bank' still being considered
(about 17 hours later)
UK Chancellor of the Exchequer Alistair Darling said that the establishment of a bad bank to ring-fence toxic bank assets had not been ruled out.UK Chancellor of the Exchequer Alistair Darling said that the establishment of a bad bank to ring-fence toxic bank assets had not been ruled out.
"We've certainly not closed the door on a bad bank if that is necessary," he told a House of Lords committee."We've certainly not closed the door on a bad bank if that is necessary," he told a House of Lords committee.
In January a Treasury rescue scheme was introduced to insure banks against heavy losses on hard-to-trade assets.In January a Treasury rescue scheme was introduced to insure banks against heavy losses on hard-to-trade assets.
But the chancellor said that he still thought that "we need to look at a range of options" that were available.But the chancellor said that he still thought that "we need to look at a range of options" that were available.
Attacks on bank cultureAttacks on bank culture
Mr Darling also said there needs to be a change of culture in the boardroom of financial institutions.Mr Darling also said there needs to be a change of culture in the boardroom of financial institutions.
If some of these institutions had asked more questions about what was going on perhaps we might not have got into this difficulty Chancellor Alistair Darling href="either url here">Bank of England lent £185bn If some of these institutions had asked more questions about what was going on perhaps we might not have got into this difficulty Chancellor Alistair Darling href="/1/hi/business/7867355.stm">Bank of England lent £185bn
He told the House of Lords Economic Affairs Committee bank directors had to ask questions about the liabilities they were taking on.He told the House of Lords Economic Affairs Committee bank directors had to ask questions about the liabilities they were taking on.
"That means, to my mind, the whole culture in boardrooms of financial institutions has to change," he said."That means, to my mind, the whole culture in boardrooms of financial institutions has to change," he said.
He said executives and non-executives "are not just there for the ride".He said executives and non-executives "are not just there for the ride".
Rather, he said, they were there to ask serious questions and to hold the executives to account.Rather, he said, they were there to ask serious questions and to hold the executives to account.
"And indeed if some of these institutions had asked more questions about what was going on perhaps we might not have got into this difficulty.""And indeed if some of these institutions had asked more questions about what was going on perhaps we might not have got into this difficulty."
Banking planBanking plan
Last year the government injected billions of pounds of taxpayers money into Royal Bank of Scotland (RBS), Lloyds TSB and HBOS.Last year the government injected billions of pounds of taxpayers money into Royal Bank of Scotland (RBS), Lloyds TSB and HBOS.
It has also privatised Northern Rock and Bradford and Bingley. It has also nationalised Northern Rock and Bradford and Bingley.
In January the government announced a second package of measures to encourage banks to lend to individuals and businesses.In January the government announced a second package of measures to encourage banks to lend to individuals and businesses.
The long list of policies includes a scheme to offer insurance against banks losing more money from the bad debts that started the credit crunch.The long list of policies includes a scheme to offer insurance against banks losing more money from the bad debts that started the credit crunch.
At the time it was felt that setting up a "bad bank" to buy up all the bad assets would take too long, and there were continuing worries about how to fairly value such toxic assets.At the time it was felt that setting up a "bad bank" to buy up all the bad assets would take too long, and there were continuing worries about how to fairly value such toxic assets.
The Bank of England has also expanded its scheme to loan money to banks in return for their dodgy assets which it would hold for up to one year.The Bank of England has also expanded its scheme to loan money to banks in return for their dodgy assets which it would hold for up to one year.