The Treasury will guarantee 90% of losses on toxic assets as part of its Asset Protection Scheme (APS), minister confirmed today.
Treasury protection will cover 90% of the credit losses which exceed an agreed 'first loss' amount, with each participating institution retaining exposure of 10%.Protection under the Scheme is offered, in the first instance, to UK incorporated authorised deposit-takers - including UK subsidiaries of foreign institutions - with more than £25bn of eligible assets.
Each applicant to the Scheme must convince the Treasury: it is adequately capitalised and funded or has a realistic plan for accessing adequate capital and funding; it has a sustainable business model and delivery plan; its funding profile, sources and mix are broad-based and sustainable; and its senior management team is credible, with demonstrable ability to deliver its business model and delivery plan.
Applicants to the scheme will be required to comply with a remuneration policy consistent with the FSA's code of practice on remuneration policies, which was published today.
The Treasury says, to protect taxpayers' interests, participants will be subject to a number of conditions and Treasury controls over the management of protected assets.
These requirements are expected to include: managing protected assets according to agreed principles and guidelines; requiring participating institutions to set up effective operating structures to manage and report on protected assets in a regular, transparent, and comprehensive fashion and the implementation of monitoring and reporting systems which allow verification of asset performance and facilitate determination of payouts.Mortgage Solutions
Caring for children and elderly relatives
Similar to June 2007
Square Mile’s series of informal interviews
Fine reduced to £60,000
Two roles created