Motion to consider. Agreed to on question.

Motion to consider. Agreed to on question.

My Lords, the background to these regulations is the failure of the previous system for regulating financial services to provide clear responsibility for financial stability, which was shared in an opaque way between the Treasury, the Bank of England and the FSA. This meant that it has been all too...

My Lords, the background to these regulations is the failure of the previous system for regulating financial services to provide clear responsibility for financial stability, which was shared in an opaque way between the Treasury, the Bank of England and the FSA. This meant that it has been all too...

My Lords, that was an interesting introduction to this order as it spent most of its time discussing measures that are not included. It also began with a preamble that was an extraordinary rewrite of history, referring to a failure to identify macroprudential risks prior to 2008. Will the Minister...

My Lords, that was an interesting introduction to this order as it spent most of its time discussing measures that are not included. It also began with a preamble that was an extraordinary rewrite of history, referring to a failure to identify macroprudential risks prior to 2008. Will the Minister...

I am grateful to the noble Lord for those extremely thoughtful questions, and I will do my best to answer them. He said that systemic risk was not on the horizon before the crisis. I think that the phrase was first used in academic literature

in 1979. Although the phrase...

I am grateful to the noble Lord for those extremely thoughtful questions, and I will do my best to answer them. He said that systemic risk was not on the horizon before the crisis. I think that the phrase was first used in academic literature

in 1979. Although the phrase...

Why not?

Why not?

The Government said in response to Vickers that they believed he was going too far, and I do not believe that that view has changed. The noble Lord asked about the loan-to-value ratio and whether that tool would not have the same effect as introducing a loan-to-value ratio. In an...

The Government said in response to Vickers that they believed he was going too far, and I do not believe that that view has changed. The noble Lord asked about the loan-to-value ratio and whether that tool would not have the same effect as introducing a loan-to-value ratio. In an...

Let us suppose that we are in the situation that we are in today, that there is no direction in place and that we wish to reduce the own funds. How do we do that?

Let us suppose that we are in the situation that we are in today, that there is no direction in place and that we wish to reduce the own funds. How do we do that?

My Lords, I do think that that is an eventuality that the order caters for because, as the noble Lord says, it uses “increase”. If I am wrong on that, I shall let him know but, as he has said, the order is relatively straightforward. It will be for the...

My Lords, I do think that that is an eventuality that the order caters for because, as the noble Lord says, it uses “increase”. If I am wrong on that, I shall let him know but, as he has said, the order is relatively straightforward. It will be for the...

Before the Minister sits down, perhaps we could go back to how an increased level of risk is to be specified by the FPC. Is that to be specified as a change in risk weights in old-fashioned Basel I structures, or is it to be specified as a modification of...

Before the Minister sits down, perhaps we could go back to how an increased level of risk is to be specified by the FPC. Is that to be specified as a change in risk weights in old-fashioned Basel I structures, or is it to be specified as a modification of...

My Lords, as I said earlier, the PRA will set overall levels; the capital models allowed by firms will, I believe be determined by the PRA.

My Lords, as I said earlier, the PRA will set overall levels; the capital models allowed by firms will, I believe be determined by the PRA.

I am sorry, but the noble Lord contradicts the instrument before us. It states clearly,

“if they gave rise to an increased level of risk specified by the FPC”.

It is not the PRA, it is the FPC that has to specify this increased level of risk.

I am sorry, but the noble Lord contradicts the instrument before us. It states clearly,

“if they gave rise to an increased level of risk specified by the FPC”.

It is not the PRA, it is the FPC that has to specify this increased level of risk.

My Lords, I am told that the FPC has the discretion to do either or both of those things, but the PRA will scrutinise how the FPC’s levels are implemented by individual firms.

My Lords, I am told that the FPC has the discretion to do either or both of those things, but the PRA will scrutinise how the FPC’s levels are implemented by individual firms.

To ask Her Majesty’s Government when interviews will be held for the appointment of external members of the Bank of England’s Financial Policy Committee; and whether they will publish the names of those serving on the interview panel, identifying any HM Treasury officials.[HL4888]

To ask Her Majesty’s Government when interviews will be held for the appointment of external members of the Bank of England’s Financial Policy Committee; and whether they will publish the names of those serving on the interview panel, identifying any HM Treasury officials.[HL4888]

My Lords, in response to an amendment at Report put forward by my noble friends Lady Noakes, Lady Wheatcroft and Lady Kramer, we committed to come back with amendments to rebalance the FPC’s membership. These amendments are intended to do just that. They will remove the executive director responsible for...

My Lords, in response to an amendment at Report put forward by my noble friends Lady Noakes, Lady Wheatcroft and Lady Kramer, we committed to come back with amendments to rebalance the FPC’s membership. These amendments are intended to do just that. They will remove the executive director responsible for...

My Lords, the amendment relates to something originally in the Bank of England Act 1998 which should not have been there in the first place. My noble friend Lord Peston and I tried very hard for it not to be put in but failed at the time. I hope that...

My Lords, the amendment relates to something originally in the Bank of England Act 1998 which should not have been there in the first place. My noble friend Lord Peston and I tried very hard for it not to be put in but failed at the time. I hope that...

My Lords, I wish to add two or three remarks to what my noble friend Lord Barnett has said.

On any logical grounds, “equal weight” is precisely what the Government would want to see in this part of the Bill. One feels that somehow the computer got jammed and “subject to...

My Lords, I wish to add two or three remarks to what my noble friend Lord Barnett has said.

On any logical grounds, “equal weight” is precisely what the Government would want to see in this part of the Bill. One feels that somehow the computer got jammed and “subject to...

My Lords, I support some of the sentiments, but not the Amendment, of the noble Lords, Lord Barnett and Lord Peston. Like them, I believe it would be a good thing if Mr Carney were to appear before the Lords Economic Affairs Committee as well as the Commons Treasury Committee....

My Lords, I support some of the sentiments, but not the Amendment, of the noble Lords, Lord Barnett and Lord Peston. Like them, I believe it would be a good thing if Mr Carney were to appear before the Lords Economic Affairs Committee as well as the Commons Treasury Committee....

My Lords, I will make sure that the suggestion to Mr Carney is passed on, but of course it is breaking radical new ground that a prospective governor should appear before the Treasury Select Committee, and I do not know whether we want to be too radical at this juncture,...

My Lords, I will make sure that the suggestion to Mr Carney is passed on, but of course it is breaking radical new ground that a prospective governor should appear before the Treasury Select Committee, and I do not know whether we want to be too radical at this juncture,...