Mark Leftly: We have every right to know about the banks' £27bn black hole

Outlook One of the stranger questions raised after the Prudential Regulatory Authority (PRA) revealed that five of the country's biggest lenders have a £27bn black hole in their balance sheets was whether or not the gap should have been disclosed at all.

Yesterday, Lloyds Banking Group was found to be the biggest culprit. It was ordered to raise another £7bn just hours after the Chancellor, George Osborne, signalled in his Mansion House speech that he is ready to sell the taxpayers' stake in the business.

While stressing that "more transparency is welcome", PricewaterhouseCoopers' head of UK financial services, Kevin Burrowes, said that it was "debatable whether this disclosure is supportive of pushing economic growth or facilitates more bank lending". He is far from the only person who feels this way and, in his defence, appreciates both sides of the argument.

Mr Burrowes has a point in that such disclosure will make it easier for banks to use the excuse that they are struggling to lend when so much cash is tied up in strengthening their balance sheets. He also argues that it is "tougher to have a public conversation than a private one", which is surely right as it becomes more difficult for banks to convince the markets that they are getting back on track.

But the unfortunate consequences of giving the banks an excuse to restrict loans and illustrating how difficult their situations remain cannot be reasons enough to keep this news under wraps. Quite the opposite, as the flipside, which Mr Burrowes acknowledges, is that investors have every right to know that they are buying into banks that will either have to find more cash or reduce riskier aspects of their businesses.

What is remarkable is how close we came to not finding out. A banking source tells me that Mr Osborne, Treasury officials and the PRA did indeed have tough talks over whether or not to make this information public.

Given that the pre-crisis dealings of the banks were so opaque and impervious to all but the most gifted of forensic accountants, their financial products so fiendishly complex, and their risk-taking so absurd, there should have been nothing to debate.

The public has the right to this information – a single detail should not be held back. Lives were ruined, businesses wrecked, a generation lost to unemployment. The public needs to know what problems face institutions that, remember, were so fundamental to the well-being of the country that they could not be left to their deserved fates of failing.

Start your day with The Independent, sign up for daily news emails
News
Keith Fraser says we should give Isis sympathises free flights to join Isis (AFP)
news
Life and Style
Google celebrates the 126th anniversary of the Eiffel Tower opening its doors to the public for the first time
techGoogle celebrates Paris's iconic landmark, which opened to the public 126 years ago today
News
Cleopatra the tortoise suffers from a painful disease that causes her shell to disintegrate; her new prosthetic one has been custom-made for her using 3D printing technology
newsCleopatra had been suffering from 'pyramiding'
News
people
Arts and Entertainment
Coachella and Lollapalooza festivals have both listed the selfie stick devices as “prohibited items”
music
Sport
Nigel Owens was targeted on Twitter because of his sexuality during the Six Nations finale between England and France earlier this month
rugbyReferee Nigel Owens on coming out, and homophobic Twitter abuse
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Client Services Assistant

£18000 - £20000 per annum: Recruitment Genius: A Client Services Assistant is ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor