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Banking Bill

In moving Amendment 194 I shall speak also to Amendment 195. These amendments concern the conflict of interest provisions set out in proposed new Section 2C(2) of the Bank of England Act 1998 which would be inserted by Clause 228. Conflicts of interest are dealt with by proposed new subsections (2) and (3). New subsection (3) provides that where a question ““touches or concerns”” a member, he must not vote but must withdraw from the meeting and be absent from the debate. However, new subsection (2) applies a rather different rule in relation to a member’s ““dealing or business”” with the Bank if it, "““falls to be considered by the Committee””." There the member, "““has to disclose his interest””," but might vote and take part in the proceedings if the committee agrees that it, "““does not give rise to a conflict of interest””." I struggle to see why there are two rules in the Bill and why they are expressed differently. I am unclear what ““dealing or business”” with the Bank might be envisaged to be discussed with the committee if they are not also matters which touch or concern the member. Furthermore, new subsection (3) is drafted in respect of the interest of a member but not with the qualification ““direct or indirect””, as in new subsection (2). Yet I imagine that if the Financial Stability Committee has, say, directors from a major financial institution on it, any conflicts would be not direct personal conflicts but indirect conflicts arising through the institution with which they are associated. I am sure that the avoidance of conflicts of interest is very important. In that context, I wonder whether the Minister can explain how the Government think that they will find people with knowledge and experience of the financial sector who do not have conflicts of interest, at least indirectly. If the failure of a major institution were in prospect, would there be a single active member of the City who did not have some form of conflict of interest via their own institution, or is it expected that the Financial Stability Committee will simply become a home for retired members of the financial services business? My amendments seek to replace the concepts of ““dealing or business”” with the Bank with, "““in relation to any person or matter””," in order to broaden subsection (2); and to remove subsection (3), which is unnecessarily narrow. There could be other ways of dealing with the issues but, for today, I beg to move.