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Banking Bill

I beg the Committee’s indulgence in allowing me to come back to that point in a moment. I also do not agree with the proposed amendment that would make the Treasury the authority with the final say. In particular, the independent regulator should make any regulatory decision, such as the decision that a bank is failing its threshold conditions—that is part of Clause 7. It is, of course, absolutely right that Ministers lead in matters that affect public funds or the wider public interest. Again, the Bill provides for this. That may well be at the heart of the observation of the noble Lord, Lord Newby, about the relative strength of the Treasury and the particular circumstances in which that strength is of considerable relevance to the operation of the tripartite arrangement. I therefore beg the noble Baroness to agree to withdraw the amendment. I understand that the purpose of Amendment 5 is to require that each of the authorities keeps each of the others informed of their actions, considerations and decisions. I shall set out why I do not believe that this amendment is necessary. I agree that consultation between the authorities on these matters is essential, as I said. The authorities will, of course, work closely together prior to and during any situation where a bank is failing. This has been demonstrated during recent action taken under the special provisions Act and with regard to other actions to protect financial stability. It is clear to me that the authorities have demonstrated a capacity to work collegiately and effectively in handling challenging situations. I believe, however, that the amendment is unnecessary as where the Bill confers powers on a lead authority it also requires consultation with the other two authorities. For example, I draw the Committee’s attention to Clause 7(5), Clause 8(3) and Clause 9(4). I hope that my explanation has satisfied the noble Baroness that appropriate provision is made for consultation in the Bill. I therefore beg her to withdraw the amendment. If I may, I shall come back to say a little more in response to the comments made by the noble Lord, Lord Lamont of Lerwick. The FSA is taking regulatory action under the Financial Services and Markets Act; it is not taking action under the SRR. It is deciding whether the SRR should apply. The SRR objectives cover how the stabilisation options will be implemented.