Bank in the clear over its rescue plan during crisis

DeSPeRATe action by the Bank of england to save the teetering financial system during the crisis did not break the law, investigators have decided.

The Bank launched controversial emergency liquidity auctions in 2008 to throw cash at British lenders as the City was on the brink of collapse.

Around £61.5bn was made available to hBOS and Royal Bank of Scotland alone through emergency loans in 2008.

There were fears the Old Lady might have offered illegal concessions to struggling firms in its eagerness to prevent a meltdown. But yesterday, the Serious Fraud Office said it had found no evidence of wrongdoing after a two-year probe.

In a statement, Bank chiefs admitted they were taken by surprise by the sudden failure of lenders worldwide in 2008.

They suggested the calamity came close to overwhelming the institution, admitting there were problems with how it operated at the time and saying that the crisis triggered a period of ‘unprecedented stress’.

The Bank referred itself to the Serious Fraud Office after a 2014 review by City lawyer Lord Grabiner suggested there were questions to answer.

A separate investigation into 100,000 documents was also carried out by City law firm Travers Smith and barrister Jonathan Laidlaw.

Grabiner was paid £129,500 for his work, and the Old Lady’s overall fees during the criminal probe came to more than £4.7m.

The SFO spent around £343,000 on the investigation.