MPs call for nationalised bank accounting review

The government should reveal the full cost of its attempts to shore up
Britain’s financial system, the Commons Treasury Committee has demanded.

The MPs have called for much greater transparency in accounting for the
government liabilities taken on by the nationalisation and part nationalisation
of institutions ranging from Northern Rock through Bradford & Bingley to the
new Lloyds Group, Royal Bank of Scotland and the proposal for the Bank of
England to buy up assets.

Sub-committee chairman Michael Fallon said: ‘In order for effective scrutiny
to be performed by parliament and our committee, the magnitude and nature of
these liabilities must be comprehensively disclosed.’

‘We are therefore demanding that the Treasury quantify and disclose the
liabilities involved in the extensive public funding of these banks. Given the
amount of public money poured into them over the last six months, taxpayers
deserve no less.’

The demands are outlined in the committee’s report on the administration and
expenditure of the Chancellor’s departments.

The report also recommends that the disclosures about government rescue
packages should appear in the annual Treasury Group Resource Accounts.

It calls for civil servants to start discussions with the National Audit
Office to agree accountancy treatments for the transactions surrounding the
nationalised and part-nationalised banks in time for the accounts to be laid
before Parliament before the Commons Summer recess in late July.

Related reading