HM Treasury allows Credit Guarantee Scheme buybacks
The Credit Guarantee Scheme, which allowed UK banks to lend using taxpayer money during the economic turbulence, has been altered by HM Treasury to allow repayment ahead of schedule.
Under the new rules, banks that have found their financial footing faster than was expected can buy back the debts from the government.
As a result, they can gradually remove themselves from the Credit Guarantee Scheme ahead of the original schedule.
George Osborne, chancellor of the exchequer, says: "That the government is able to do this shows that the UK banking sector is clearly on the mend."
However, the comments coincide with Vince Cable's warning to the Department for Business, Innovation and Skills' parliamentary committee that banks could face fresh action if they do not lend enough in the months to come.
According to reports, he told the committee that possible steps to ensure the availability of finance for the future could include higher taxation on bankers' bonuses.
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