Backgrounder: what the papers say about UKFI

The papers have reported with a pretty straight bat that the
government has created an arms-length
company to manage its bank shareholdings, mainly due to yesterday’s
heated Treasury Select committee meeting with the chancellor, head of the Bank
of England and FSA boss all getting a rough ride..

Chaired by über-executive Sir Philip Hampton and Treasury official John
Kingman as chief executive, the body will look to safeguard taxpayers’ interest
in the banks, and that value is created.

The
Guardian reports the Lib-Dems as concerned that the other
private sector board members to be recruited could have little experience of
recession. Lib Dem Treasury spokesman Lord Oakeshott wanted them to have ‘been
around the block a few times’.

He added that UKFI would have its work cut out implementing more realistic
banking bonus structures and lending policies.

Initially the company would manage its investments in RBS, HBoS and
LloydsTSB, chancellor Alistair Darling also revealed that Northern Rock and
Bradford & Bingley, both nationalised, would go into the new company’s
hands, reports
the
FT.

John Kingman is described as ‘affable and highly intelligent’, reports
the
Independent. He has served in a number of important roles at
the Treasury, and is a former press officer to Gordon Brown during his time as
chancellor.

But the paper warns that Kingman has never been involved in banking or fund
management.

‘Able as he is, though, the obvious query is how a figure who has enjoyed
such closeness to ministers can fulfil the requirement that the government’s
relationship with UKFI be truly “arm’s length”,’ the paper says.

Further reading:

Government creates company to
manage banks’ shareholdings