Her Majesty’s Treasury Risks Independence Singularity
Courtesy of Marla Singer
What might we discover in an audit of the Federal Reserve? Well, let’s ask Her Majesty’s Treasury, which, imagine this, actually released details of the assets dumped from the holding tanks of Royal Bank of Scotland into the cesspool of the United Kingdom’s “Asset Protection Scheme.” As a bit of background, perhaps you might frame things thus: RBS is to APS as Citi is to TARP. (That would make Lloyds Goldman we suppose). Specifically:
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:
- Lloyds will not participate in the APS and instead will raise additional private sector capital and pay a fee to the taxpayer for the implicit protection provided to date. This will reduce the risk borne by the taxpayer, improving value for money.
- RBS will participate in the APS under revised terms that improve incentives and deliver better risk-sharing with the private sector.
Then follows a rather amazing bit of prose.
On the 7 December, the government published further details on the APS, including:
Detailed information about the Asset Protection Scheme (APS), including a list of assets protected under the scheme and a framework for the Asset Protection Agency (PDF 4MB);
Wow.
An auditor’s report it isn’t, but after 100 pages or so, you certainly have quite a picture of what RBS thought it might be up to. This is one of our favorites:
GBP 30 billion in swaps and other derivatives. What could go wrong?
Oddly, given what the Fed tells us about the dangers of disclosure, the entire United Kingdom did not find itself sucked into an independence singularity immediately after the release. Really. See for yourself.
| Attachment | Size |
|---|---|
| rbs_aps_apa.pdf | 3.98 MB |
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