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Banking Bill

Amendment 165A adds a new subsection to Clause 188, so that if an interbank payment system does or does not do something in accordance with a direction given by the Bank of England under Clause 188, it will not be liable for damages. The amendment has been suggested by the Payments Council, an independent industry-led body that brings banks and users together to discuss strategic issues in relation to payment systems. The council accepts the need for the Bank to be given powers, in Clause 188, to instruct an interbank payment system to act, even if the rules of that system preclude this, as might be the case with a bank that is being dealt with under the special resolution regime. It is normal for a bank in financial difficulties to be excluded from a payment system, and the Bank may want to overrule that. The concern that has been expressed relates to possible actions by creditors of the failing or failed bank against the payment system; for example, for allowing retail depositors to withdraw their money, potentially disadvantaging the main body of creditors. How does the Minister see the position of interbank payment systems that are the subject of a direction? If there is any risk to the payment system in complying with the direction, how will it be protected? I beg to move.