House of Commons Public Bill Committee Proceedings

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Report Stage Proceedings: 26th November 2008
947

Banking Bill, continued

Order of consideration of stabilisation options

Mr Mark Hoban

Not called  NC8

To move the following Clause:—

‘The stabilisation options in sections 11, 12, and 13 must be considered in the

order set out above.’.

Financial Services Compensation Scheme

Mr Mark Hoban

Not called  NC9

To move the following Clause:—

‘(1)
The scheme manager must decide, once a stabilisation power has been exercised,

how to achieve Objective 3 of the special resolution regime through—

(a)
the transfer of a relevant account to another financial institution, or

(b)
making a payment to relevant depositors.

(2)
Subsection (1)(a) takes precedence over subsection (1)(b).

(3)
Prior to making its decision the scheme manager must consult—

(a)
the Treasury,

(b)
the Bank of England, and

(c)
the FSA.’.

Report on exercise of stabilisation powers

Mr Mark Hoban

Not called  NC10

To move the following Clause:—

‘(1)
On the exercise of stabilisation powers, the Treasury must lay before Parliament

a report setting out—

(a)
the reason for the exercise by the FSA of its powers under section 7, and

(b)
how the Treasury of the Bank of England then exercised their

stabilisation powers to achieve the special resolution regime objectives.

(2)
Where the Treasury believes the disclosure of certain information in the report in

subsection (1) would adversely affect achieving the special resolution regime

objectives, that information may be withheld from publication for up to six

Report Stage Proceedings: 26th November 2008
948

Banking Bill, continued

months from the date on which the stabilisation powers were exercised, but must

be published at the expiration of that period.’.

Expiry of the Act

Mr Nick Clegg

Dr Vincent Cable

Mr Jeremy Browne

Mr Colin Breed

Dr John Pugh

Mr Paul Burstow

Not called  NC14

To move the following Clause:—

‘This Act shall cease to have effect on 26th November 2011.’.

Mr Chancellor of the Exchequer

Agreed to  19

Page  1,  line  18  [Clause  1],  after ‘28,’, insert ‘29,’.

Mr Chancellor of the Exchequer

Agreed to  20

Page  1,  line  18  [Clause  1],  after ‘30’, insert ‘, 31’.

Mr Chancellor of the Exchequer

Agreed to  21

Page  1,  line  19  [Clause  1],  after ‘43,’, insert ‘44,’.

Mr Chancellor of the Exchequer

Agreed to  22

Page  1,  line  19  [Clause  1],  leave out ‘and 45’ and insert ‘45 and 46’.

Mr Mark Hoban

Not called  74

Page  3,  line  34  [Clause  5],  at end insert—

‘(aa)
how the interests of creditors will be taken into account in the use of the

options set out in susection (1),’.

Report Stage Proceedings: 26th November 2008
949

Banking Bill, continued

Mr Mark Hoban

Not called  6

Page  4,  line  2  [Clause  5],  leave out ‘and’.

Mr Mark Hoban

Not called  7

Page  4,  line  3  [Clause  5],  at end insert ‘, and

(g)
the meaning of “financial stability”.’.

Mr Mark Hoban

Not called  9

Page  4,  line  3  [Clause  5],  at end insert ‘, and

(g)
on the criteria by which the FSA will judge breach of threshold

conditions.’.

Mr Mark Hoban

Not called  8

Page  4,  line  27  [Clause  7],  leave out from ‘conditions’ to end of line 28 and insert

‘(within the meaning of paragraph 4 of Schedule 6 to the Financial Services and Markets

Act 2000 (threshold conditions: adequate resources)).’.

Mr Mark Hoban

Not called  12

Page  4,  line  32  [Clause  7],  at end insert—

‘(3A)
Condition 3 is that the FSA has consulted—

(a)
the Bank of England to ensure that it will be able to exercise a

stabilisation power under section 8, or

(b)
the Treasury to ensure that it will be able to exercise its powers under

section 9.’.

Mr Mark Hoban

Not called  10

Page  6,  line  36  [Clause  12],  leave out paragraph (a).

Mr Mark Hoban

Not called  11

Page  7,  line  15  [Clause  12],  at end insert—

‘(6)
The primary objective of a bridge bank shall be to facilitate the sale of a bank - in

whole or in part - to one or more private sector purchasers, but if that is not

feasible the bridge bank must be either—

(a)
wound up in a manner that meets the special resolution regime objectives

and is in the interests of the remaining creditors, or

(b)
taken into temporary public ownership.’.

Report Stage Proceedings: 26th November 2008
950

Banking Bill, continued

Mr Chancellor of the Exchequer

Agreed to  23

Page  29,  line  21  [Clause  60],  leave out ‘is wound up’ and insert ‘enters

insolvency’.

Mr Chancellor of the Exchequer

Agreed to  24

Page  29,  line  23  [Clause  60],  leave out ‘been wound up’ and insert ‘entered

insolvency’.

Mr Chancellor of the Exchequer

Agreed to  25

Page  29  [Clause  60],  leave out lines 31 and 32 and insert—

‘(c)
the reference to insolvency includes a reference to (i) liquidation, (ii)

bank insolvency, (iii) administration, (iv) bank administration, (v)

receivership, (vi) a composition with creditors, and (vii) a scheme of

arrangement.’.

Mr Chancellor of the Exchequer

Agreed to  26

Page  30  [Clause  60],  leave out lines 12 and 13.

Mr Chancellor of the Exchequer

Agreed to  27

Page  30,  line  32  [Clause  62],  leave out ‘a company’ and insert ‘anything’.

Mr Chancellor of the Exchequer

Agreed to  28

Page  30,  line  32  [Clause  62],  after ‘is’, insert ‘, or was immediately before the

transfer,’.

Mr Chancellor of the Exchequer

Agreed to  29

Page  30,  line  38  [Clause  62],  at end insert ‘all or part of’.

Mr Chancellor of the Exchequer

Agreed to  30

Page  30,  line  42  [Clause  62],  after ‘business’, insert ‘, or part of it,’.

Mr Chancellor of the Exchequer

Agreed to  31

Page  31,  line  41  [Clause  63],  at end insert ‘, or part of it,’.

Report Stage Proceedings: 26th November 2008
951

Banking Bill, continued

Mr Chancellor of the Exchequer

Agreed to  32

Page  32,  line  5  [Clause  64],  leave out ‘a company’ and insert ‘anything’.

Mr Chancellor of the Exchequer

Agreed to  33

Page  32,  line  7  [Clause  64],  at end insert ‘(whether or not it is also a group

undertaking in relation to the transferred bank immediately after the transfer),’.

Mr Chancellor of the Exchequer

Agreed to  34

Page  32,  line  24  [Clause  64],  leave out ‘undertaking’ and insert ‘company’.

Mr Chancellor of the Exchequer

Agreed to  35

Page  32,  line  31  [Clause  64],  at end insert—

‘(8)
The Bank of England may act under or by virtue of subsection (6) only with the

consent of the Treasury.’.

Mr Chancellor of the Exchequer

Agreed to  36

Page  33,  line  6  [Clause  65],  leave out ‘transferee to operate the transferred

business’ and insert ‘transferred bank to operate’.

Mr Chancellor of the Exchequer

Agreed to  37

Page  33,  line  40  [Clause  67],  at end insert—

‘(4)
A reference in subsection (1) to obligations under a section includes a reference

to obligations under that section as applied under section [Special resolution

regime: Continuity obligations: onward property transfers] or [Special

resolution regime: Continuity obligations: onward share transfers].’.

Mr David Gauke

Not called  3

Page  36,  line  5,  leave out Clause 72.

Mr Chancellor of the Exchequer

Agreed to  38

Page  36,  line  18  [Clause  72],  after ‘enactment’, insert ‘(other than a provision

made by or under this Act)’.

Mr David Gauke

Not called  1

Page  36,  line  42  [Clause  72],  at end insert—

‘(9)
No order under this section may amend this Act.’.

Report Stage Proceedings: 26th November 2008
952

Banking Bill, continued

Mr David Gauke

Not called  2

Page  36,  line  42  [Clause  72],  at end insert—

‘(9)
This section shall cease to have effect at the end of the period of two years

beginning with the day on which this Act is passed.’.

Mr Mark Hoban

Not called  4

Page  46,  line  6  [Clause  93],  at end insert—

‘(5)
Subsection (4) above does not take precedence over Schedule 6 to the Insolvency

Act 1986.’.

Mr Chancellor of the Exchequer

Agreed to  39

Page  63,  line  33  [Clause  119],  at end insert—

‘(8)
Section 413(2) of the Insolvency Act 1986 (rules: duty to consult Insolvency

Rules Committee) shall not apply to the first set of rules which is made in reliance

on this section.’.

Mr Chancellor of the Exchequer

Agreed to  40

Page  83,  line  41  [Clause  154],  at end insert—

‘(6)
Section 413(2) of the Insolvency Act 1986 (rules: duty to consult Insolvency

Rules Committee) shall not apply to the first set of rules which is made in reliance

on this section.’.

Mr Mark Hoban

Negatived on division  5

Page  86,  line  7,  leave out Clause 164.

Mr Mark Hoban

Not called  17

Page  86,  line  24  [Clause  164],  at end insert—

‘(da)
arrangements for institutions that have permission under part 4 of the

Financial Services and Markets Act 2000 to carry out the regulated

activity of accepting deposits (within the meaning of section 22 of the

Act, taken with Schedule 2 and by order under section 22) but are not

Report Stage Proceedings: 26th November 2008
953

Banking Bill, continued

incorporated in, or formed under the law of, any part of the United

Kingdom;’.

Mr Mark Hoban

Not called  13

Page  87,  line  12  [Clause  165],  after ‘(2)’, insert ‘Subject to subsection (2A),’.

Mr Chancellor of the Exchequer

Agreed to  41

Page  87,  line  13  [Clause  165],  leave out ‘contribute towards expenses connected’

and insert ‘to make payments in connection’.

Mr Chancellor of the Exchequer

Agreed to  42

Page  87,  line  16  [Clause  165],  leave out ‘contributions’ and insert ‘payments’.

Mr Mark Hoban

Not called  14

Page  87,  line  18  [Clause  165],  at end insert—

‘(2A)
Prior to requiring the scheme manager to contribute towards the exercise of the

stabilisation powers, the Treasury may require—

(a)
a private sector purchaser to make a contribution where the option under

sections 11 or 12 has been exercised, or

(b)
the bank liquidator to make payment where a bank insolvency order has

been made, or

(c)
the bank administrator to make a payment where a bank administration

order has been made.’.

Mr Chancellor of the Exchequer

Agreed to  43

Page  87,  line  21  [Clause  165],  leave out ‘contribute towards’ and insert ‘incur’.

Mr Chancellor of the Exchequer

Agreed to  44

Page  87,  line  23  [Clause  165],  after ‘incurred’, insert ‘in connection with the

exercise of the stabilisation power’.

Mr Chancellor of the Exchequer

Agreed to  45

Page  87,  line  25  [Clause  165],  leave out ‘contributed’ and insert ‘paid’.

Mr Chancellor of the Exchequer

Agreed to  46

Page  87,  line  27  [Clause  165],  leave out ‘contributions’ and insert ‘payments’.