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Banking Bill

I disagree. We do not think that it is appropriate to extend the FSA’s powers to give directions to the managers of authorised unit trust schemes to exempt the operators from liability in damages as a result of those directions. After all, the power to give directions is to ensure that the system is being operated in a way that does not threaten financial stability or disrupt markets. We do not intend to use the power in the way that the noble Baroness suggests as it would involve a more limited operation with regard to potential creditors. We are talking about a significant failure in the system, in which case talk of indemnity is misplaced. I alluded to the Financial Services Authority’s powers in this area because those do not exempt operators from liability in damages as a result of directions which the authority may give. I am sorry if I have not been entirely clear but we may have been at cross-purposes over the nature of these powers. I am seeking to explain that these powers would operate at a more substantial and significant level than in the instance given by the noble Baroness. In such circumstances, indemnity would not be appropriate.