Credit Guarantee Scheme closes

A Government scheme designed to prop up the banks during the financial crisis has finally been shut down.

The Credit Guarantee Scheme (CGS) saw the Government underwrite up to £140bn of bank assets in order to help ensure that the financial system did not collapse.

A Treasury spokesman said that the closure of the scheme meant that the financial system was finally returning to normal.

"This is a milestone moment when the last government aid which was set up at the time for the financial crisis in the autumn of 2008 shuts down," he said.

"Over the duration of the scheme there were no defaults and the taxpayer benefited from the fees paid by banks to access the scheme. The fact that the scheme existed though added vital support to the financial system."

The closing of the CGS follows Royal Bank of Scotland's exit from the similar Asset Protection Scheme last week.

Since mid 2010, the support provided by the taxpayer to the banking sector in the form of guarantees has fallen by more than £450bn, a drop of almost 95 per cent.