Banking Bill

We have always been clear, throughout the various stages of the Bill, about what the threshold conditions are. The problem that I have with the hon. Gentleman's amendment is that limiting the definition to ““adequate resources”” is too narrow and does not take other circumstances into account. That is why I shall invite hon. Members to oppose the amendment. We had a debate in Committee about the FSA handbook. The hon. Member for Fareham rightly pointed out some of the areas of that handbook that, in his view, would need amending. As I said in Committee, the FSA is considering whether to update the handbook, and in particular the section on threshold conditions, to clarify how its judgment of clause 7 will be met. I believe that the handbook is the right place to set out which of the threshold conditions the FSA will pay particular attention to when making its judgment. Amendment No. 12 would require the FSA to consult the Bank of England or the Treasury to ensure that they can use a stabilisation power under the Bill before it confirms that the general conditions are met and that those powers can therefore be used. In our view, there is already sufficient provision in the Bill to ensure full consultation between the authorities about each of the key decisions before and during the SRR, including about whether the general conditions under clause 7 are met. Clause 7(5) in particular requires the FSA to consult the Bank of England and the Treasury. It seems unnecessary to impose an additional requirement to consult the Bank and Treasury on that specific issue through the amendment. Amendments Nos. 10 and 11 propose that the primary objective of a bridge bank should be set out in the Bill. The primary objective that the hon. Gentleman cites is taken from the draft code of practice published by the Treasury earlier this month. I welcome his support for the text, but I am afraid that I cannot agree with the amendment. The special resolution objectives, as provided for by clause 4, are the primary guide for how the authorities should act when using the tools and powers of the SRR. These special resolution objectives are set out in primary legislation and that is right because they are intended to cover the entirety of part 1 of the Bill. The bridge bank objective, on the other hand, relates to just one particular stabilisation option. I do not think it is appropriate to place a specific bridge bank objective on a similar statutory standing to the special resolution objectives, because that does not provide a clear sense of purpose. For example, it would not be clear whether the bridge bank objectives were intended to be subservient to the special resolution objectives. Finally, clause 4 provides that the authorities should have regard to the code. In addition, the draft code provides that once actions have been taken under the SRR the authorities should make public statements explaining how they have acted. The statements will make it clear how the special resolution objectives have been balanced against each other and on what basis decisions regarding the use of stabilisation options have been made. I hope that my speech adequately addresses the various amendments tabled by the hon. Gentleman, and as I have given him some assurances on the public record I hope that he will not press them to a Division. Question put and agreed to. Clause read a Second time, and added to the Bill.