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Banking Bill

I have great sympathy with the case made by noble Lords who have spoken and, in particular, with the proposals made by the noble Lord, Lord Eatwell. The Bank’s objective of protecting and enhancing the stability of the financial system of the United Kingdom—the formula in the Bill—is impossible to do with the resources at its disposal and with its functions and those of the FSA. The FSA knows—or should know—what is going on in individual institutions to a far greater extent on a day-to-day basis than the Bank does, and the FSA needs to be in day-to-day touch with the Bank about that information on a rolling basis. The proposal of the noble Lord, Lord Eatwell, sets up a mechanism that enables that to happen. The failure of one bank can lead to a failure in stability of the entire financial system, as we have seen in recent months. Surely it makes sense for the people who should and do know what is happening in any bank to inform the Bank of England in an orderly, structured way through this committee, rather than having the Bank looking down and telling them what constitutes the stability of the system, when, almost by definition, it cannot have the information at its fingertips that will enable it to do its job. I hope that the Minister will accept the spirit, if not the letter, of these amendments.