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Banking Bill (Money)

That is a helpful intervention and I am reassured a great deal by it. The model of the intelligent central bank and the generation of management change can often represent a better and cheaper way forward and should be tried before these rather more draconian steps under the SRR. I would also appreciate some reassurance that ““continuity of banking services”” does not mean continuity of management, management practice, management bonuses and bad practice in failing banks. Those factors need to be changed as quickly as possible to limit the damage. If continuity means that the brand and the management must carry on, that could perpetuate a situation like the one that we have at the moment in which never has so much been spent by so few to so little effect. Huge sums of money are tipped into the big bad banks, and if change is not generated quickly enough at the top, the taxpayer is lumbered as a lot of money goes into the banks to no immediately apparent good effect. It is estimated that £1 trillion will be spent on fixing the banks, but we could fix an awful lot in Britain if we spent that sum on something other than banks. That is why resentment is building up. We need to ensure that we try the easy steps first before we move on to the wider regimes. It would be sensible if the objectives were slimmed down a bit. They should obviously include protecting public funds and depositors. They also include the general aim of financial stability. The continuity requirement should mean preserving a worthwhile business, not necessarily preserving a management style or brand. In the case of Northern Rock, the Government had good intentions when they nationalised it, although I thought that there were many cheaper and easier ways to save it. The first reaction on nationalisation was to put it in run-off, so far from preserving its contribution to the system, it ran down its mortgage book and sacked its staff—not perhaps what the Minister's colleagues expected from nationalisation. If we accept the amendments, it would be easier in the future to try to create continuity, and that would be welcome, because it is ridiculous to nationalise something and then run it down and sack the staff. The business should continue trading in one form or another, although it needs quick management change, a change of culture, a different approach to risk and, perhaps, to marketing and branding. However, it is a waste of money just to close it all down.