Banking Bill

[back to previous text]

Mr. Gauke: I am grateful to the Minister for those comments. I do not disagree with him on whether the Treasury should take a leading role. The question is whether it takes the sole role. I should like to press him on this matter. Is the origin of the clause a degree of tension that exists as a consequence of the Northern Rock issue and the view that the Bank of England took on the restrictions that applied to any covert action that it could take? There is a feeling that it took a more prescriptive view than was generally deemed necessary.
Ian Pearson: The origin of the clause lies in the consultation and the fact that we think it a necessary part of the Bill. Of course, the Treasury will talk to the Bank of England, and they will work together on all these matters. It is entirely right and proper that someone should lead and take final decisions. When it comes to international obligations, that has to be the Treasury.
Mr. Gauke: If the Bank of England took a different view and said that international obligations prevented it from doing something and the Treasury said that they did not, would the Treasury view prevail?
Ian Pearson: I do not want to get into hypothetical circumstances, but let me make it clear that the Treasury has the lead responsibility in this regard. It will be the Treasury’s views that count when considering what our international obligations are and how they should be interpreted.
Question put and agreed to.
Clause 66 ordered to stand part of the Bill.
Clauses 67 to 75 ordered to stand part of the Bill.

Clause 76

Credit unions
Question proposed, That the clause stand part of the Bill.
Mr. Hoban: I have a quick question for the Minister. In what circumstances does he envisage introducing orders to apply the SRR to credit unions?
Ian Pearson: The clause creates a power to extend the SRR to credit unions. We will keep the position under review, but we have no immediate plans to extend stabilisation powers such as bridge bank, temporary public ownership and private sector purchasing powers to credit unions at this time. Credit unions have a relatively small number of depositors, and their failure does not pose the same threat to financial stability that the failure of banks and building societies might. Moreover, credit unions are dealt with effectively under existing insolvency procedures. However, it is important to keep the matter under review. We have talked about future-proofing legislation, and that is what this provision does.
Question put and agreed to.
Clause 76 ordered to stand part of the Bill.
Further consideration adjourned.—[Mr. Blizzard.]
Adjourned accordingly at twenty-four minutes past Ten o’clock till this day at One o’clock.
Previous Contents
House of Commons 
home page Parliament home page House of 
Lords home page search page enquiries ordering index

©Parliamentary copyright 2008
Prepared 14 November 2008