RBS 2008 Annual Report Download - page 267

RBS Group Annual Report and Accounts 2008266
Notes on the accounts continuedNotes on the accounts continued
41 Related parties (continued)
No impairment losses were recognised by the Group in 2008 in respect
of balances with UK Government and UK Government controlled bodies.
The Group participates in a number of schemes operated by the Bank
of England and the UK Government and made available to eligible
banks and building societies.
Bank of England facilities include:
•Open market operations – these provide market participants with
funding at market rates on a tender basis in the form of short and
long-term repos on a wide range of collateral and outright purchases
of high-quality bonds to enable them to meet the reserves that they
must hold at the Bank of England.
•US dollar repo operations – these commenced in September 2008
taking the form of an auction. Eligible collateral consists of securities
routinely eligible in the Bank's short-term repo open market
operations together with conventional US Treasuries.
•The special liquidity scheme – this was launched in April 2008 to
allow financial institutions to swap temporarily illiquid assets for
treasury bills, with fees charged based on the spread between
3-month LIBOR and the 3-month gilt repo rate.
As at 31 December 2008, the Group’s utilisation of these facilities
amounted to £41.8 billion.
Government credit guarantee scheme – this was announced in
October 2008. The Government, in return for a fee (50 basis points plus
the bank’s median five-year credit default spread during the twelve
months to 7 October 2008), guarantees new unsecured borrowing.
As at 31 December 2008, the Group had obtained funding from the
Bank of England and issued debt guaranteed by the government
totalling £32.2 billion.
42 Post balance sheet events
There have been no significant events between the year end and the date of approval of these accounts which would require a change to or
disclosure in the accounts.