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Banking Bill

My Lords, I am disappointed by the Minister’s response, which I could characterise as the not-invented-here variety. He said that banks’ balance sheets were not to blame for the financial crisis. I did not suggest that what had happened over the past decade or so on banks’ balance sheets was to blame. However, as the regulatory authorities missed a trick in their regulation of banks’ balance sheets during that period, there is a good question to be asked about why that was. The Minister talked about all these interactions in the tripartite authorities. There is a big issue about how effective those interactions are and the Minister will just have to accept that many of us are deeply sceptical about it. We are not clear whether there is a meeting of minds—whether, if the Bank says something, it is heard, in a deep sense, by the FSA. There is no evidence of that to date. The issue is not so much about what happens behind closed doors but, as I tried to say in my Amendment, about getting a greater public debate. I do not believe that the financial stability report is the kind of document that could generate that debate. It is a lost cause, if you like. The Minister said that the most useful advice would relate to stressed institutions, but I do not believe that that is the case. The issue is to make sure that the macro risks, as perceived by the Bank, are fed into the FSA’s own micro-level risk-assessed approach to the individual institutions. As I said, the Governor of the Bank of England, in a speech only last month, referred to the need for, "““an additional instrument to stabilise the growth of the financial sector balance sheet””." What was the governor referring to? I do not believe that he was referring to more deep and meaningful conversations in the tripartite authorities. I believe that he was referring to something with an external relevance and publication so that the issues are properly raised. It is clear that the Government will have a closed mind to the useful suggestions of the Conservative Party, unless and until they choose to steal them at a later stage and claim them as their own. I will therefore not pursue my amendment further. But it is a great pity. I beg leave to withdraw the amendment. Amendment 103 withdrawn.