Monday, October 13, 2008

Pay no attention to the name on the door

UK Chancellor Alistair Darling, coming to the conclusion that the huge actual and contingent outlays to support the banking sector don't need to be counted as debt --

So any additional borrowing and debt incurred by the Government, as a result of these proposals, is either:

1. in return for assets;
2. charged at commercial rates;
3. or in the form of a temporary loan to the banks.

So, as was the case with the temporary nationalisation of Northern Rock, the most appropriate measures of government borrowing and debt to judge the position of the public finances will be ones that exclude the Government’s stake in the banking sector.

UK Treasury statement explaining who will be running the new banking funds --

To reflect the implementation of the scheme, the government will tomorrow announce a revised debt remit for the Debt Management Office.

Question: If it's not debt, why is it being managed by the, er, "Debt" Management Office?

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