Written question asked by Lord Laird (Ulster Unionist Party), in the House of Lords. It was answered by Lord Myners (Labour) on Monday, 22 February 2010.

Banking: Iceland

Question: To ask Her Majesty's Government further to the Written Answer by Lord Myners on 27 January (WA 329–30), what were the common law powers used to guarantee and repay all the deposits by United Kingdom retail investors in the Icelandic banks.

Answer: The common law powers used by Treasury Ministers to make payments in connection with the retail deposit books of Heritable Bank, Kaupthing Singer & Friedlander and the UK branch of Landsbanki are referred to as the "Ram doctrine". These payments comprised loans to the Financial Services Compensation Scheme to cover that proportion of the retail deposits protected by the scheme and cash payments to cover the proportion of the retail deposits which were not protected by the scheme. This doctrine was set out in a memorandum by the then First Parliamentary Counsel, Sir Glanville Ram in 1945. This explains that as a matter of law a Minister of the Crown may exercise any powers that the Crown has power to exercise, except to the extent to which the Minister is precluded by statute either expressly or by necessary implication. These powers include the power to enter into contracts or to make payments to others. The statutory authority for the Treasury to incur expenditure in the course of exercising these powers was provided by section 228 of the Banking Act 2009.

Secondary information

Type: Written question
Reference: 2055; 717 c174-5WA
Session: 2009-10
Related items: Banking: Iceland
Thursday, 8 April 2010
Written questions
House of Lords; Banking: Iceland
Wednesday, 27 January 2010
Written questions
House of Lords
Subjects: Compensation Bank services Banks Common law Insolvency Ministerial powers Iceland
Link: View this Written question on www.publications.parliament.uk