London: Britain has paid banks, lawyers and other advisers £26.5 million ($44.2 million) for work related to setting up its scheme to insure risky assets held by two banks.
Investment banks Citi and Credit Suisse and asset manager BlackRock were among seven firms to be paid for advice, according to a Treasury response to a Freedom of Information request by Reuters.
Part-nationalised Royal Bank of Scotland and Lloyds Banking Group plan to insure about £585 billion pounds of their risky assets through the government’s asset protection scheme (APS).
Terms of the complex scheme have not yet been finalised. The banks agreed to participate more than six months ago, but Lloyds is considering options to limit its involvement in the plan or raise funds privately, industry sources have said.
Lloyds in March agreed to pay £15.6 billion pounds to insure £260 billion of assets.
The Treasury said certain fees related to the APS would be recoverable from RBS or Lloyds, so £26.5 million did not represent a net cost to the Treasury.
Law firm Slaughter & May and accounting and financial services companies Ernst & Young, KPMG and PricewaterhouseCoopers also provided advice, the Treasury said.
A breakdown of how much each firm received was not provided.
The Treasury said in July it had paid Credit Suisse £9.6 million and Citi 1.9 million in the first half of this year for advice related to the APS.
It paid £7.1 million for investment banking advice for all of 2008, which was split between Goldman Sachs, Morgan Stanley and Deutsche Bank.
Most of the Treasury’s internal work on the scheme has been by about 60 staff working in a new Financial Stability Unit, which includes both permanent staff, secondees from other departments and private sector firms, the FoI response said.