---

Banking Bill

Amendment 29 29: After Clause 7, insert the following new Clause— ““Report on use of stabilisation power (1) On the exercise of stabilisation powers, the Treasury must lay before Parliament a report setting out— (a) the reason for the exercise by the FSA of its powers under section 7, (b) the steps taken by the FSA, if any, to avoid the use of the stabilisation powers, and (c) how the Treasury or the Bank of England then exercised their stabilisation powers to achieve the special resolution regime objectives. (2) Where the Treasury believes the disclosure of certain information in the report in subsection (1) would adversely affect the achievement of the special resolution regime objectives, that information may be withheld from publication for up to six months from the date on which the stabilisation powers were exercised, but must be published at the expiration of that period.”” This amendment seeks to ensure that Parliament is kept informed about two things—the use of the stabilisation powers and that they have not been unnecessarily used. This will be achieved as set out in the amendment by asking the FSA why it used the stabilisation powers and what steps it took to avoid taking such draconian action, and by asking the Treasury how it used the stabilisation powers to achieve the objectives of the special resolution regime. The stabilisation powers give authorities great and very wide powers, including discretion to change priorities at will. It is only right that, having such powers, there should be transparency as to how they are used. For reasons of stability, it may be necessary to be opaque for a period of time; this is reflected in subsection (2) of the amendment, which allows for a delay of six months before information has to be disclosed. However, to allow powers in this legislation to be used in total obscurity would be quite wrong and would, over time, create the temptation to be freer with the power than might be desirable, if not the temptation actually to abuse the power. The code of practice gives guidance but, without being told how and why the powers have been used, it would not be possible to make a judgment on what has taken place or how effective the code has been. This Government have made much of the need for transparency, and it is more important than ever that there is transparency when such wide powers as this Bill is seeking are used. Seeing how the powers have been used will give insight into how the authorities have used the powers that they have been given and their way of thinking, as well as providing valuable lessons on how powers may be used in the future.