The Great Debate UK
Britain's asset protection scheme, invented to protect the banking system, is morphing into a bureaucratic monster. It's time to kill it off. Though state support is still needed, there are simpler ways for the government to prop up its ailing lenders.
More than seven months after it was conceived, and five months after Royal Bank of Scotland and Lloyds Banking Group signed up to use it, details of the APS have still not been agreed. The sheer task of sifting through 585 billion pounds worth of loans to be insured by the government means any final agreement is months away.
The only winners from this mess are investment banks, accounting firms and the public sector, which has spawned another quango. The Asset Protection Agency is supposed to monitor the assets in the scheme and make sure that the banks -- which are on the hook for only 10 percent of losses on insured loans above a “first-loss” portion -- do not diddle taxpayers.
The APA has found an acting chief executive in Jeremy Bennett, a former Credit Suisse banker. But Bennett has let it be known he does not want the job on a permanent basis -- hardly a ringing endorsement for the APA as it hunts for recruits.