King reveals HBOS and RBS emergency loans

Mervyn King reveals HBOS and RBS emergency loans

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Tuesday, 24, Nov 2009 05:32

The Bank of England has revealed Royal Bank of Scotland (RBS) and HBOS were given £61.1 billion in emergency funds.

At the height of the financial crisis last year the two banks were given the loans, which were paid back in full by January this year.

Mervyn King, the Bank of England's governor, said the money had been given to the banks as a "last resort", telling the Treasury select committee this morning that it "was to prevent a loss of confidence spreading through the financial system as whole".

Mr King was speaking to the committee as he delivered the Bank's inflation report.

RBS has since signed up for the government's asset protection scheme. Lloyds Banking Group, which took over HBOS, announced this morning plans to raise capital from its shareholders by announcing a shares sale.