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Banking: Asset Protection Scheme

My Lords, first, let me apologise. I did use the word "toxic" and it probably is an incorrect word. I have no difficulty in saying sorry. The issue around these assets is partly to do with the fact that they are poisonous, in that correct definition of toxic, but also that they are currently suffering from illiquidity. One of the virtues of the type of scheme that we have offered the banks is that it provides an opportunity for time and patience to see values recover. As the noble Lord, Lord James of Blackheath, knows, the London Rules worked rather well in a different environment. I am not sure they would work as well now in an environment in which loans are so widely distributed and where the lenders are based all over the world and the asset is now often in the hands of a hedge fund rather than in the hands of a bank. The London Rules operated in a previous environment in which most lending was domestic and mostly under the supervision of the Bank of England. I first came to work in the City in 1972 or 1973 during the secondary banking crisis. The London Rules worked then but I do not think they would work as well now. That said, talks are going on at the moment which seek to promote codes and practices which are very similar to those which we associate with the London Rules.