Banking Bill

Yes, as my right hon. Friend the Chancellor has said clearly, we will do whatever it takes to bring stability to the banking system. The fact that we have taken this integrated package of actions and reforms has been widely welcomed by the financial community. It is a programme that is being adopted by other countries in Europe and, indeed, partly in the United States, depending on their own circumstances. We believe that it is the right path to take. Let me turn to the special resolution regime, which has been the subject of much of the debate. It will replace the temporary powers taken in the Banking (Special Provisions) Act 2008. When a bank gets into difficulties, they can be resolved through normal regulatory interventions or voluntary action. However, as we have seen recently, bank failures will sometimes occur and they can damage confidence, disrupt financial markets, harm depositors and generate significant costs to business and the economy as a whole. The objectives of the SRR include protecting and enhancing financial stability and confidence in the banking system, protecting depositors and protecting public funds. The SRR provides the authorities with a range of tools to meet those objectives, including the transfer of a bank or its business to a private sector purchaser, to a bridge bank—which I know was welcomed by the hon. Member for Dundee, East (Stewart Hosie)—and temporary public ownership. Further, a new bank administration procedure is to be put in place to support partial transfers of a bank's business. The Bill also creates a new insolvency process for banks that can be used where appropriate to enable prompt FSCS payments to eligible depositors and also provides for the winding-up of the bank's affairs. By setting out a clear and credible statutory resolution regime to address failing banks, which removes control from the bank's management, the Bill provides a strong incentive for banks and their directors to take action to prevent their businesses getting into difficulties. We can debate in Committee in greater detail some of the issues raised such as the trigger mechanism and the role of the Bank of England, but I note what the shadow Chancellor has said—that although he is raising concerns, he does not want to resist the overall thrust of the Government's conclusions.