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Banking Bill

As I indicated, we were not quite sure about the nature of the noble Baroness’s amendment. The Bank of England makes supplemental property transfer instruments following the transfer of property to a private sector purchaser or bridge bank. These provide particularly valuable flexibility for property transfers. Not only do the powers provide the Bank of England with the means of ensuring that an initial property transfer is effected; they may also produce a better outcome for the resolution. For example, a further transfer of property to a bridge bank may increase the value of the bridge bank and increase the amount that a private sector purchaser is prepared to pay for the business. We think that there is merit in the clause as it stands. The noble Baroness mentioned the foreign law issue. Clause 35 makes clear that a property transfer instrument may seek to transfer property located outside the United Kingdom and rights and liabilities governed by foreign jurisdiction. The Government understand that such a transfer may not always be effective, and the other place recognised it as a difficulty. As there are limits to what we can guarantee in these terms, we have included Clause 39, which provides that a transferor or transferee are under obligation to take any necessary steps to make the transfer of property effective. This enhances the likelihood of a successful transfer. What happens if the transfer cannot be made under foreign law? You could use a reverse transfer for the purpose of bridging the transfer back into alignment with foreign law. A reverse transfer under domestic law would certainly be possible and we might have recourse to that. The noble Baroness has identified an area of difficulty which we debated in the previous Committee sitting. None of us doubts that there are difficulties with property transfer when foreign jurisdictions are involved. It is not possible for us to give absolute guarantees in every single case. What the noble Baroness can rightly expect is that the Bill is drafted in such a way that the authorities are concerned to ensure that an effective transfer takes place wherever this is possible. That is what the existing drafting of the legislation is designed to do.