Reclaim Local Democracy
from the clutches of the
financial sector

Bankers, brokers and advisors have tricked councils into taking out expensive, risky loans, endangering our essential services.
Find out how to challenge the illegitimate lending practices of the City and help reclaim local democracy.

WHAT IS A LOBO LOAN ?

LOBO loans are “teaser rate” loans containing derivatives provided by banks to public authorities. LOBO stands for "Lender Option, Borrower Option".
LOBO loans are expensive risky products that local authorities are locked into. As a result tax-payer money is being unnecessarily wasted while the private sector is making huge profits.

THE DETAILS

FEEDING THE BANKS

Local Authorities are borrowing from private banks instead of the Government Public Works Loan Board (PWLB) even if it is more expensive to do so. As a result, tax payer money is being unnecessarily wasted, and profits from lending are going to the banks rather then recirculating into the public sector.

FALLING IN THE TRAP

Banks are providing “teaser rate” loan contracts to public authorities called LOBO loans that contain derivatives. These loans are potentially illegal as Local Authorities were prohibited from taking out swap contracts (a form of derivative) following a 1989 ruling known as Hammersmith and Fulham vs Goldman Sachs case.

IN WHOSE INTEREST

Local Authorities rely on private institutions to help manage, advise on, structure and broker their financial affairs. These firms, known as Treasury Management Advisers not only charge high fees, but operate with significant conflicts of interest, whilst enabling Council Treasurers to behave like short term, profit driven, investment bankers.

WHO IS WATCHING

No one! Local Authority finance is unregulated by the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA). Financial documents are not available to the public and, following the closure of the Local Government Audit Commission in 2015, auditing is outsourced to the big four accounting firms, the auditors of the banks.

DOES YOUR COUNCIL HAVE LOBOS?

TAKE ACTION NOW

WHAT ELSE CAN YOU DO

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