House of Commons Public Bill Committee Proceedings

Session 2012 - 13
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Other Bills before Parliament

Public Bill Committee Proceedings: 16 April 2013
28

Financial Services (Banking Reform) Bill, continued

the level of net lending to private non-financial corporations over that

reference period.’.

Mutual societies

Chris Leslie

Cathy Jamieson

Withdrawn  NC18

To move the following Clause:—

‘After section 50(3)(f) of the Financial Services Act 2012, insert—

“(g)
making provision for the increased diversity of the financial

services sector and promotion of mutual societies, including

arrangements to measure the number of members of mutual

societies, and the market share for mutual societies as a

proportion of the UK financial services sector.”.’.

Bank bail-in regime

Chris Leslie

Cathy Jamieson

Not called  NC19

To move the following Clause:—

‘(1)
The Bank of England must, at least once in every year, prepare an assessment of

any progress which has been made towards the introduction of a bank bail-in

regime in the United Kingdom or, once a bank bail-in regime has been

introduced, of its operation.

(2)
If a bank bail-in regime is not in force in the United Kingdom by the end of 2015,

the Treasury must by regulations make provision for such a regime.

(3)
an assessment under subsection (1) must include—

(a)
an assessment of how much of the issued debt of banks would be covered

by any proposed bank bail-in regime or is covered by the provisions of

the bank bail-in regime in force;

(b)
(if a bank bail-in regime is in force) an account of the sorts of companies

within groups which have creditors who are covered by the bank bail-in

regime and of the sorts of persons who are creditors who are so covered;

(c)
a review of the descriptions of creditors who would be covered by any

proposed bail-in regime or are covered by the provisions of the bank bail-

in regime in force, and

(d)
an account of progress towards international co-operation in relation to

bail-in regimes.

(4)
The Bank of England must send the assessment to the Treasury.

(5)
The Treasury must lay the assessment before Parliament.

(6)
The Bank of England must publish the assessment in such manner as they think

fit.

Public Bill Committee Proceedings: 16 April 2013
29

Financial Services (Banking Reform) Bill, continued

(7)
In this section “bank bail-in regime” means provisions under which losses

incurred by a bank are to be met by certain descriptions of creditors of the bank

should the bank encounter financial difficulties which might otherwise lead to the

taking of action which would be likely to have implications for public funds.

(8)
For the purposes of subsection (7) “action having implications for public funds”

has the same meaning as in section 78(1) of the Banking Act 2009.

(9)
In this section “bank” means a UK institution which has permission under Part

4A of FSMA 2000 to carry on the regulated activity of accepting deposits, other

than a building society (within the meaning of the Building Societies Act 1986)

or any description of institution excluded by virtue of subsection (2)(b) of section

142A of that Act from being a ring-fenced body as defined in subsection (1) of

that section.’.

Annual assessment of developments in respect of risk-weighting

Chris Leslie

Cathy Jamieson

Withdrawn  NC20

To move the following Clause:—

‘(1)
The Bank of England must, at least once in every year, prepare an assessment of

developments in respect of risk-weighting in relation to banks and building

societies.

(2)
The Bank must send the assessment to the Treasury.

(3)
The Treasury must lay the assessment before Parliament.

(4)
The Bank of England must publish the assessment in such manner as they think

fit.

(5)
In this section “risk weighting” means the process by which the assets of a bank

or building society are accorded a risk weight.

(6)
In this section—

“bank” means a UK institution which has permission under Part 4A of

FSMA 2000 to carry on the regulated activity of accepting deposits, other

than any description of institution excluded by virtue of subsection (2)(b)

of section 142A of that Act from being a ring-fenced body as defined in

subsection (1) of that section (or a building society);

“building society” has the same meaning as in the Building Societies Act

1986;

“risk weight” means a percentage that is derived from the risk to the value

of an asset.’.

Financial services compensation scheme extension

Chris Leslie

Cathy Jamieson

Not called  NC21

To move the following Clause:—

Public Bill Committee Proceedings: 16 April 2013
30

Financial Services (Banking Reform) Bill, continued

‘(1)
Section 213 of FSMA 2000 (The compensation scheme) is amended as follows.

(2)
In subsection (1A)—

(a)
omit the “and” following paragraph (a),

(b)
after paragraph (b) insert—


“and

(c)
that where a relevant person operates under more than

one brand, the compensation scheme applies to each

brand as if each was a separate authorised person.”.

(3)
In subsection 3—

(a)
omit the “and” following paragraph (a),

(b)
after that paragraph insert—

“(aa)
to extend the limit of any compensation payable to

persons making a claim in appropriate circumstances

where the loss exceeds the limit that would otherwise

apply as a result of a temporary high deposit, and”.’.

Limits on excessive market power

Nigel Mills

Not called  NC22

To move the following Clause:—

‘(1)
With effect from 1 January 2020 no ring-fenced body or group of ring-fenced

bodies may have excessive market power in respect of a core banking service.

(2)
For the purposes of section (1) above core banking service means—

(a)
the provision of personal current accounts and overdrafts;

(b)
the provision of liquidity management services for small and medium-

sized enterprises;

(c)
the provision of mortgage services;

(d)
the provision of savings accounts;

(e)
the provision of unsecured personal loans.

(3)
For the purposes of section (1) excessive market power is defined as a market

share equal to 20% or higher.

(4)
If any ring-fenced body or group of ring-fenced bodies is deemed by the

appropriate regulator to have excessive market power in relation to any core

banking service for two successive accounting periods, with effect from six

months after the end of the second accounting period, the part 4A permission for

the ring fenced body or group of ring-fenced bodies shall be treated as having

been cancelled as it relates to that core banking service.’.

Chris Leslie

Cathy Jamieson

Not called  31

Title,  line  4,  after ‘insolvency;’, insert ‘to make provision in relation to a bank bail-in

regime;’.

Public Bill Committee Proceedings: 16 April 2013
31

Financial Services (Banking Reform) Bill, continued

Chris Leslie

Cathy Jamieson

Not called  33

Title,  line  4,  after ‘insolvency;’, insert ‘to make provision for reports relating to

developments in respect of risk-weighting;’.

Bill, as amended, to be reported.



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