Britain could lose the £66 billion (US$105 billion, 82 billion euros) it spent on rescuing Royal Bank of Scotland and Lloyds Banking Group and made key errors over failed lender Northern Rock, lawmakers said on Friday.
The Public Accounts Committee -- a panel of British lawmakers -- issued the gloomy verdict in a eagerly-awaited report into the government’s handling of Northern Rock, which has since been taken over by Richard Branson’s Virgin Group.
At the height of the credit crunch in 2008, Britain’s then-Labour government was forced to nationalise Northern Rock and pump billions of taxpayers’ cash into Royal Bank of Scotland (RBS) and Lloyds Banking Group (LBG).
“The £66 billion cash spent purchasing shares in RBS and Lloyds may never be recovered, and the Treasury must also ensure it is prepared to deal with any future crisis, whatever form it may take, when it emerges,” the committee warned on Friday.
Taxpayers still own 81 per cent of RBS and 39.6 per cent of LBG following the enormously expensive bailouts.
The committee meanwhile slammed the Treasury over its slow reaction to the banking crisis and its lack of adequate skills and knowledge.
“The Treasury was part of a monumental collective failure to understand how the pre-crisis boom could lead to a banking crisis,” it said in the report.
