Banking Bill

My hon. Friend makes a good point. The regulators must understand the position and be comfortable with it. Some derivatives will be more risky than others. The regulator will say ““If you want to trade in more risky derivatives, you must have a stronger balance sheet. Your balance sheet must, in a sense, be insured against failure by carrying more capital.”” That too will act as a disincentive to some of the more outrageous financial instruments. Let me move from the exciting world of investment banking to the world of retail banking. Some of those present—including, I am afraid, many Opposition Members—speak of the ““tsunami””, the crisis that began in America in the sub-prime market and swept over to the United Kingdom. Let us be perfectly honest. I do not think that Northern Rock trades in the United States, I do not think that Bradford & Bingley trades in the United States, and I am sure that HBOS does not have a mortgage business in the United States; yet those banks, and may be others, were offering people outrageous mortgages. They were offering 125 per cent. of a property's value, and they were offering self-certification. They were saying ““Pick a number, and we will not challenge you””. No wonder we have a home-grown crisis in this country. I have to ask why on earth the regulator allowed the banks to get away with that. It was not done in secret; there were flaming advertisements all over their branches letting people know what a great deal they would get. If that did not set alarm bells ringing in the FSA, I do not know what would.