Treasury pays 107m in fees
THE Treasury expects to have spent £107m by April 2010 on legal and financial advisers to sort out the banking crisis, a report from the National Audit Office revealed today.
The legal firm Slaughter and May tops a table of fees paid for services with a bill of £32.9m, followed by Credit Suisse with £15.4m.
Two sets of financial advisers were appointed, from Credit Suisse and Deutsche Bank, on retainers of £200,000 a month for a year.
But the Treasury should recover around £100m – the vast majority – from Royal Bank of Scotland and Lloyds Banking Group, the NAO said.
In negotiating the Asset Protection Scheme, the government’s bank insurance scheme, Lloyds agreed to commit to lend an additional £14bn – £3bn for residential mortgages and £11bn for businesses. RBS agreed to lend an additional £25bn – £9bn for residential and £16bn for businesses.
RBS and Lloyds are on track to meet their retail mortgage lending commitments, the NAO said. But they are unlikely to meet their commitments for businesses.
The only formal sanction available if the banks fail to meet targets is a potential refusal to extend guarantees for wholesale borrowing under the Credit Guarantee Scheme.
Amyas Morse, head of the National Audit Office, said “lessons must be learnt”.
“The authorities need to put formal arrangements in place to evaluate the effectiveness of the support provided to banks in order to inform future policy makers,” he said.