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Banking Bill

Amendment 106 deals with the continuity obligations which can be imposed. Under Clause 63(2), the residual bank and each group company have to provide whatever services and facilities are required for the business of the transferee. There is no time limit or other restriction in this clause. The British Bankers’ Association believes that a maximum time limit should be placed on this. The residual bank and its group companies have no right of appeal against a notice that they must provide services, so it is important to ensure that the obligation placed on them is proportionate. The BBA has suggested a period of 12 months on the basis that this is the normal notice period for service contracts entered into commercially. My own amendment is rather more modest because it sets a maximum of two years. It ought to be possible for the transferee to make its own arrangements for whatever services or facilities it requires. In practice, 12 months should be adequate but, at two years, my amendment provides plenty of time to deal with things like IT systems, property and anything else that is likely to be needed. It seems grossly unfair to the residual bank to make it suffer, perhaps indefinitely, by providing services to the transferee. It is not a question of money, although adequate compensation is necessary, as we shall debate on the next group of amendments. A residual bank needs to concentrate on its own remaining business and not be sidetracked into being a service provider to a transferee which may even be a competitor. I beg to move.