The City’s bailout taskforce has given itself less than two weeks to submit a draft rescue package to the Bank of England as banks, investors and insurers race to come up with a solution for corporate Britain.
Insiders said the working group will evaluate aid packages overseas, including across Scandinavia and America, for inspiration, as well as how British industry was reconstructed after the Second World War. City institutions were given until April 14 to pitch their proposals.
Sir Adrian Montague, chairman of Aviva, who is leading the Recapitalisation Group out of industry body TheCityUK, has promised to write to Andrew Bailey, BoE Governor, at the end of the month to “set out initial thinking,” sources said.
“Given the speed needed, the end of the month felt like a realistic timetable to scope out the challenge and how the City would structure tackling it,” one person said. “The plan is to look at the potential role of the private sector, where the likely points of failure are, and create a tool kit that says to the Treasury and the Bank of England ‘this is what the City thinks is possible’.”
But options are already diminishing for businesses. Corporate broker Peel Hunt last week warned that equity markets were running out of capital for placings and will start being a lot more discerning. The taskforce was still discussing what should be in its remit late last week, including whether it should explore ways to further improve the Government’s emergency lending scheme to small businesses, which has been heavily criticised. Alison Rose, chief executive of RBS, said she understood “all options” were on the table.