The Financial Conduct Authority (FCA) is an independent regulator. Treasury Ministers had no discussions with the chairman before the FCA announced the decision to discontinue the review of banking culture included in the 2015-16 Business Plan. The FCA has set out in its published response to a Freedom of Information request, the dates when it communicated its decision to discontinue this review to other organisations. This response is available on the FCA website.

The Overseas Territories are separate jurisdictions with their own democratically elected Governments, Constitutions and laws under which Territory authorities are responsible for the regulation of banks. It is primarily for the law enforcement authorities of the Territories to deal with any allegations brought to them. UK law enforcement authorities would only become involved if the allegations involved criminality in the United Kingdom.

The Caribbean Overseas Territories and Bermuda are active members of the Caribbean Financial Action Task Force, one of Financial Action Task Force associated bodies. They are subject to evaluations of their anti-money laundering regimes through this body and these assessments are publicly available.

The UK and Territory Governments have a shared agenda on the application of high international standards for financial regulation. Most recently at the 2014 Joint Ministerial Council Territory Leaders agreed to work with the UK in raising international standards to tackle money laundering, tax evasion, illicit finance and corruption.

Ministers have regular discussions with the FCA on a wide range of issues. As was the case with previous administrations, it is not the Government’s practice to give details of such discussions. However, by 2018, the UK led drive to revolutionize international tax transparency will mean that over 90 countries, including Switzerland, will be exchanging information with us on financial accounts automatically every year. This will be an unprecedented step change in HM Revenue & Customs (HMRC’s) ability to tackle offshore tax evasion.

UK Banks are already subject to extensive disclosure requirements which have been substantially strengthened under this Government.

The Government is doing everything it can to support those affected by flooding, and has announced a package of measures to support affected homes and businesses. Further detail of the package of measures can be found here:

https://www.gov.uk/government/news/uk-floods-2014-government-response

These measures are funded from general taxation, including of financial services activity. A Bank Levy is already in place, and it is currently forecast to raise £2.7 billion in 2014-15 and £2.9 billion a year thereafter.

The Government has not received a specific proposal from the Royal Bank of Scotland (RBS) or Lloyds Banking Group (LBG) for this year’s remuneration round so it is not yet possible to evaluate fully the merits and implications for shareholders. It is important for taxpayers that such proposals are considered fully and properly.

The Government works closely with UK Financial Investments (UKFI) to ensure that the Royal Bank of Scotland and Lloyds Banking Group follow best practice in setting pay levels. UKFI engages as a shareholder to ensure incentives are based on long-term, sustainable performance which rebuilds the businesses of the banks and protects value for the taxpayer as shareholder. UKFI will seek to ensure that neither bank pays any more than the minimum necessary.

The rules governing remuneration, including bonuses paid to senior bank executives are set out in the Prudential Regulation Authority’s and Financial Conduct Authority’s Remuneration Code:

http://fshandbook.info/FS/html/handbook/SYSC/19A

The Government has not received a specific proposal from the Royal Bank of Scotland (RBS) or Lloyds Banking Group (LBG) for this year’s remuneration round so it is not yet possible to evaluate fully the merits and implications for shareholders. It is important for taxpayers that such proposals are considered fully and properly.

The Government works closely with UK Financial Investments (UKFI) to ensure that the Royal Bank of Scotland and Lloyds Banking Group follow best practice in setting pay levels. UKFI engages as a shareholder to ensure incentives are based on long-term, sustainable performance which rebuilds the businesses of the banks and protects value for the taxpayer as shareholder. UKFI will seek to ensure that neither bank pays any more than the minimum necessary.

The rules governing remuneration, including bonuses paid to senior bank executives are set out in the Prudential Regulation Authority’s and Financial Conduct Authority’s Remuneration Code:

http://fshandbook.info/FS/html/handbook/SYSC/19A

The Government has not received a specific proposal from the Royal Bank of Scotland (RBS) or Lloyds Banking Group (LBG) for this year’s remuneration round so it is not yet possible to evaluate fully the merits and implications for shareholders. It is important for taxpayers that such proposals are considered fully and properly.

The Government works closely with UK Financial Investments (UKFI) to ensure that the Royal Bank of Scotland and Lloyds Banking Group follow best practice in setting pay levels. UKFI engages as a shareholder to ensure incentives are based on long-term, sustainable performance which rebuilds the businesses of the banks and protects value for the taxpayer as shareholder. UKFI will seek to ensure that neither bank pays any more than the minimum necessary.

The rules governing remuneration, including bonuses paid to senior bank executives are set out in the Prudential Regulation Authority’s and Financial Conduct Authority’s Remuneration Code:

http://fshandbook.info/FS/html/handbook/SYSC/19A

Both Lloyds Banking Group and the Royal Bank of Scotland are commercial companies in which the Government is a shareholder, but they are run on a commercial basis. To ensure that this is the case, UK Financial Investments (UKFI) manage the Government's stake at arm's length, on behalf of the Government.

Lloyds Banking Group and the Royal Bank of Scotland publish annual remuneration reports to ensure that their remuneration policy is both transparent and appropriate. The remuneration reports set out in detail the banks' overall remuneration policy, including the remuneration of senior executive employees.

As you are aware the Government's shareholdings in Lloyds Banking Group (LBG) and the Royal Bank of Scotland (RBS) are managed on a commercial and arm's length basis by UK Financial Investments Ltd (UKFI). UKFI's role is to manage the shares and not to manage the banks.

Dr Tomlinson published his report in a private capacity-it is not a Government report. The Government is unable to comment on the veracity of the allegations. Nevertheless these are serious allegations. We understand RBS are investigating them; it is important that their investigation is concluded thoroughly and promptly.

The Financial Conduct Authority (FCA) has considered the reports published by Sir Andrew Large into lending practices at RBS and, separately, by Dr Lawrence Tomlinson into banks' treatment of customers in financial difficulty.

Accordingly, the FCA has agreed with RBS that an independent skilled person will be appointed in accordance with the FCA's power under section 166 of FSMA to review the allegations in the reports against RBS' practices within an agreed time scale.

If the findings from the review reveal issues which come within the FCA's remit, the FCA will consider further regulatory measures.

The Government has no plans to bring in a duty of care for retail banks when offering financial products for sale. A duty of care would not give retail banks a clear view of the conduct that is 'expected of them or add anything to regulatory or other legal requirements that already apply relating to the sale of financial products.

The National Loan Guarantee Scheme (NLGS) is the only government scheme that provides government-guarantees on funding to UK banks. The scheme was launched to help businesses access cheaper finance by reducing the cost of bank funding.

In the light of the Funding for Lending Scheme (FLS), banks who were offering NLGS loans will now, instead, deliver credit easing to the whole economy through the FLS. However the NLGS remains available to banks if they wish to use it in the future or if market conditions change.

The Government is already taking forward a number of measures to make the operations of banks more transparent.

Specifically, the Government is working with the industry—through the British Bankers Association (BBA) and other interested parties—to secure a commitment from the banks that they will publish postcode level lending data broken down by institution. If it is not possible to reach a satisfactory industry-led agreement the Government will introduce amendments to the Banking Reform Bill to ensure that the data is published.

As and when matters come to the attention of the Serious Fraud Office (SFO) they are assessed in the context of the SFO's remit to investigate fraud, bribery and corruption. If appropriate, relevant matters will be considered for criminal investigation in line with SFO internal procedures.