On Friday's Newsnight, Jo assessed the significance of the credit rating downgrade of 12 UK financial institutions.  Jo said: "What the downgrades are responding to are the increasing likelihood that the state won't have to bail out the banks again.  This is in a way a positive development rather than a negative one."  When questioned about the future viability of RBS, Jo explained: "We should not write off everything that RBS has done in terms of recapitalising itself.  RBS's core tier one capital ratio stood at the end of the second half at 11.1 per cent, which made it one of the strongest banks in Europe.  In a stressed scenario, that went down to 6.3 per cent - now that was still above the critical ceiling of five per cent." 

On the ongoing crisis in the Eurozone, Jo said: "I think George Osborne was right a few weeks ago to say that Europe has six to eight weeks to deliver a credible plan and I think by the time the G20 summit comes along next month, financial markets certainly want to see a plan on the table.  That involves eurozone governments setting out a clear path to further fiscal integration, it involves considerable commitment by two governments in particular - Spain and Italy - towards serious structural reform and it involves political leadership and unity on a scale which we simply haven't seen so far."

Jo also expressed his support for the Government's Project Merlin, which ensures banks lend to small businesses.  "Yes the banks have a funding problem but it is important we make them stick to their commitments under Project Merlin.  It's a critical part of the Government's growth strategy.  Project Merlin is delivering, and we have to make sure it continues to deliver."

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