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Banking Bill

We thought that the two provisions were relatively uncontroversial but the noble Baroness wants me to comment on the two subsections. The first, subsection (4), allows the Financial Stability Committee to delegate any of its functions to two or more of its members, other than the Treasury representative and co-opted non-voting members. The intention is to allow the committee, in effect, to nominate two of its members, either executives, non-executives or a combination of both, to fulfil one of its functions. This could be used, for example, if the committee wished something to be done in relation to which particular members had special expertise. In this case, the committee could delegate the task to any two or more individual members. For example, imagine the case of the partial transfer powers being used by the Bank of England in respect of a particular bank. This provision would allow the committee to delegate to two or three members the function in new Section 2B(2)(d), proposed in Clause 228, of monitoring the Bank’s use of the stabilisation powers to resolve the failing bank. These two or three members then monitor the transfer of the Bank and any decisions and actions taken in respect of the resolutions; gather information on the Bank’s actions in respect of bank X; and consider the effectiveness and appropriateness of any action taken. The members could then go back to the full committee and report their findings. I readily accept that it is unlikely that the committee will need to use this mechanism on a regular basis, but I see no reason why we should not enhance the committee’s flexibility by including this option in the Bill. Subsection (5), which this amendment would also delete, would insert a new subsection into the Bank of England Act 1998, clarifying that the court’s role of managing the Bank’s affairs, including its strategy and financial management, should be subject both to the Bank’s existing objectives—relating to monetary policy, as set out in Section 11 of the 1998 Act—and the Bank’s new financial stability objective, set out in subsection (1) of this clause. This is a logical and straightforward provision, which merely clarifies that the court’s management of the Bank’s activities should be subject to its dual statutory objectives. I hope the noble Baroness will feel that I have justified the two provisions and feel safe in withdrawing her amendment.