Darling: Taxpayer will get rewards
Monday, 13 Oct 2008 09:04
Darling: Taxpayer will see rewards from bank investments
Alistair Darling has warned banks there are strings attached to the £37 billion bailout of Royal Bank of Scotland (RBS), HBOS and Lloyds TSB.
He has also moved to calm taxpayers that the government will aim to make cash on its investment in the banks – with the state becoming taking 60 per cent of RBS and 40 per cent of the combined Lloyds TSB/HBOS.
"This does not come cost-free," the chancellor of the exchequer told BBC One's Breakfast.
"Loans and investment have come at a price and there are strings attached. We have to look after the taxpayer.
"We are taking a substantial shareholding – we will get rewards and the taxpayer will get money back."
Mr Darling explained the government needed to stabilise and rebuild the banking system, and it is only when the banks were again strong that they can start lending to businesses and consumers.
He also explained RBS has been told bonuses to top executives will not be paid and the government will put people on banks' boards to protect taxpayers.
However, the chancellor said ministers would not be running banks and they would be run at arm's length.
Recommended ...
Fill in one simple form and we will put you in touch with an investments advisor who will compare investment opportunities and provide you with a free no obligation investment quote.