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Banking Bill

Amendment 163 would delete subsection (3) of Clause 181. This is a probing amendment. We have now reached Part 5 of the Bill, which deals with interbank payment systems. I hope we will not be detained too long, although I have tabled a few amendments to this part of the Bill. Subsection (3) says that the Treasury must not designate an interbank payment system which is operated solely by the Bank of England. We have no problem with that since it would mean the bank would regulate itself, but it raises a number of questions. First, who provides the oversight of the systems operated by the Bank of England? The Bank of England, does not do it—quite rightly. Who does? This part of the Bill has some quite heavy oversight provisions relating to interbank payment systems, including the ability to issue penalties. Therefore, who is to check that the Bank meets the principles set out under Clause 185 or the code of practice under Clause 186? Is it the Treasury? From my limited knowledge of the Treasury’s relationship with the Bank of England, I do not think it can be said that the former oversees the latter in any meaningful way, so I wonder who would look at payment systems operated by the Bank. Secondly, what will happen if the Bank partly operates the system, as I believe is the case with CHAPS? This system will presumably be specified under Clause 181. Does it mean that the Bank will regulate itself in relation to the part that the Bank operates? Lastly, my honourable friends in another place got quite excited about a suggestion in the Explanatory Notes, which I could not find in our version, that the Bank of England might step in and start running clearing systems. If that happens—and it is clearly a possibility—that system will presumably already have been specified. Would that lead to the Bank regulating itself in that case? These are points for clarification and I beg to move.