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Banking Bill

It is the Government’s view, as I said earlier, that the bank resolution fund satisfies the conditions of the ECHR. The proceeds of resolution will be the product of a series of management decisions by a bridge bank’s board of directors and the Bank of England as a shareholder—for example, how the business should be managed, when and at what price to sell parts of the bridge bank and so on—or, alternatively, the Treasury if the bank is brought into temporary public ownership in the light of prevailing market conditions. We consider that a duty is necessary in some circumstances in order to provide a specific protection for all the beneficiaries’ interests and to help to ensure that the proceeds of resolution will bear a reasonable relation to the value of the property expropriated from the failing bank, subject to the overriding need to act in a manner consistent with the SRR objectives. The noble Baroness asks why the wording is permissive, and I fully understand why she should seek an explanation. In certain circumstances, such as the initial transfer to a bridge bank, disposals by the Bank of England days after the initial transfer or where there is no need for duty and no ongoing management decisions, the word ““may”” would be appropriate. However, I agree with the noble Baroness that in the majority of circumstances one would contemplate that the use of the word ““may”” was permissive. I should like to take away her comments. I assure her that we will reflect carefully on whether a modification of language would be helpful in addressing the point she has raised. On that basis, I hope she might be kind enough to withdraw her amendment.