Mr John Redwood (Wokingham) (Con): As someone who believes that we need to get the deficit down and do more to assist growth to help that, will the Chancellor look at the dreadful losses at RBS and the big hit on capital values on its shares, and see what more can be done to manage that colossal pool of assets in the interests of economic growth and the taxpayer?
The Chancellor of the Exchequer (Mr George Osborne): We of course continue to monitor the situation at RBS and all the British banks very closely. There is a concern in the financial markets about the capitalisation and liquidity provisions of banks in many countries. I have to say that those concerns have not been expressed at the moment about the UK. We passed the stress tests well and we have a strong liquidity provision in place for the banks, including RBS, and the markets can therefore have confidence in British banks.
August 15, 2011
Stress tests without provision for the values of sovereign debt holdings by banks is not a stress test. RBS has already I believe written off a substantial amount against Greek debt. The question should have been what provisions have the government got in place if the euro zone breaks apart, instant death for banks or if the EU issues upwards of 2 trillion €s of euro bonds, slow death for tax payers. One of the two has to happen eventually unless somebody clever comes along with an alternative that is acceptable. Keynes and the left got us into this mess the PM and other Western leaders need a hefty shove to the right to sort this mess out.
August 15, 2011
I think it is a pity that Mr Osborne’s response does not, so far as I can see, address the points raised in your question.