(7 years ago)
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The Economic Secretary to the Treasury (Simon Kirby)
I can today confirm that I have laid a Treasury Minute informing the House of the contingent liability that HM Treasury has taken on in authorising the sale of a portfolio of Bradford & Bingley loans acquired during the financial crisis under the last Labour Government.
This includes certain remote fundamental market-standard warranties which are capped at 100% of the final sale price. The maximum contingent liability arising from these remote warranties is capped at the total consideration received, giving a maximum contingent liability of £11.9 billion. These fundamental warranties are considered to be so remote that they do not meet the definition of a contingent liability requiring disclosure under International Financial Reporting Standards. However, they are disclosed as remote contingent liabilities under principles of parliamentary accountability.
Further market-standard time and valued capped warranties and indemnities confirming regulatory, legislative, and contractual compliance have been provided to the purchasers. The maximum contingent liability arising is approximately £0.79 billion.
I will update the House of any further changes to Bradford & Bingley as necessary.
[HCWS595]