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Banking Bill

My noble friend Lord Eatwell raises the question of Lehman Brothers. If one looks back on what has happened over the past 18 months in the global banking system, there have been various phases. I think that the decision of the American authorities to allow Lehman to fail took us into the third and most challenging phase. There was serious further erosion of confidence as a result, and many in the United States of America now recognise that there were consequences which they do not welcome. We have proposed further amendments to deal with investment banks. We do not believe that an SRR-type regime is appropriate for an investment bank; nor do we believe that conventional insolvency procedures are appropriate. My noble friend referred to this matter on Second Reading, and I will reflect on what he says. My noble friend asked an earlier question about Clause 2, which provides for an interpretation of the term ““bank”” for the purposes of Part 1. The reason that no reference is made to investment banks is that the amendments that I laid yesterday with respect to investment banks, which relate to insolvency as I have said, will not be a part of the special resolution regime that is the subject matter of Part 1. My noble friend Lord Eatwell also asked why no reference is made at that point in the Bill to bank holding companies, which are the subject of another group of amendments which I have laid. The answer is that the application of the term ““bank holding company”” is dealt with in the new clauses in related amendments that I have laid. I shall therefore reflect on whether further reference in Clause 2 is necessary, but I am not minded at this stage to believe that it is.