Oral question asked in the House of Lords, by Lord Bridges (Crossbench). It was answered on Wednesday, 10 October 2007.

Banks: Sub-prime Lending

Question: My Lords, may I make the following practical suggestion; namely, that the SFA should be requested to inform the firms that it supervises that they should not include in their accounts assets that have not been formally approved by accountants in this country under the procedures established by existing United Kingdom legislation? Thus, funds such as the US non-prime mortgage loans could not be used in balance sheets here without the approval of the SFA. I should explain that I have no current interest in the City of London, although on retirement from the public service I was for some years a member of the board of the Securities and Futures Association before the establishment of the existing authority and I served as a member of its disciplinary committee. The Minister may feel inclined to reply that this would bolt the stable door after the horse has gone but the purpose is to—

Answer: My Lords, I am grateful to the noble Lord for his great expertise in this area and for his constructive suggestion on how this issue should be tackled. The whole House will recognise that in certain areas it is easier to be wise after the event, but his proposal needs to be looked at carefully and taken into account in future arrangements.

Secondary information