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Financial stability agreements

The Government has concluded discussions with Lloyds Banking Group (Lloyds) and Royal Bank of Scotland (RBS) regarding their participation in the Government’s Asset Protection Scheme (APS).  As a result of improved market conditions and following extensive due diligence announced in February, the Government can announce that:

The likely costs to the taxpayer and the risks on the impact on the public finances have been reduced. Both banks will still be required to meet tough conditions on pay and lending.

On the 7 December, the government published further details on the APS, including:

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Background

In January this year the Government announced a comprehensive finanical stability package which included the Asset Protection Scheme, designed to restore confidence by protecting financial institutions against exposure to future losses on certain legacy assets.

In February the Government announced details of the Asset Protection Scheme, and an in-principle agreement with Royal Bank of Scotland to participate in the Scheme.

In March, Lloyds Banking Group also indicated its intention to participate in the Scheme.

The Asset Protection Agency, an executive agency of HM Treasury, was set up to run the Asset Protection Scheme on behalf of the Treasury.

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