Banking Bill

The hon. Gentleman is right. We should seek to apply capital adequacy requirements in a counter-cyclical way. In an open and global market, that is obviously best done in co-ordination with other central banks and through the Basel arrangements, if they can be reformed. We suggested that as long ago as March, and it is good that that line of thought is also being pursued by the European Central Bank and the Federal Reserve. Yesterday, the Prime Minister appeared to acknowledge, apparently for the first time, that that Conservative idea might have some merit. He said that in future banks"““have got to lay aside more for the possibility that there will be contractions””." Perhaps that is the Prime Minister's way of admitting that he did not actually abolish boom and bust, and that one needs to fix the roof while the sun is shining—