Kaupthing Singer & Friedlander Limited (Determination of Compensation) Order 2008

The range of questions asked was considerable. If I fail to answer any, I will carefully examine Hansard and ensure that I provide full answers to Members of the Committee who raised them, with copies to all those who participated in the debate. I start with the comments from the noble Baroness, Lady Noakes. For obvious reasons, I will not say anything that relates to the forthcoming court action in respect of Northern Rock which is being raised by two hedge funds and another party. The argument that Northern Rock can be continued as a going concern can be only on the basis that it continues to enjoy substantial government support, a point with which I think that the noble Lord, Lord Oakeshott, would agree. I shall say a little more in a moment in response to the observations of the noble Viscount, Lord Eccles, about whether Bradford & Bingley met threshold conditions and the threat that the situation constituted to financial stability. The noble Baroness, Lady Noakes, asked me to speculate on the gross amount of the assets, net of provisions and liabilities, of Bradford & Bingley. I understand that Bradford & Bingley continues to be under an FSA reporting obligation and that that information will in due course be provided, as indeed will further information about Bradford & Bingley, as required to be declared in a business plan that has to be filed not later than the end of March 2009 in respect of state aid and restructuring requirements. That will also answer the questions that the noble Baroness, Lady Noakes, asks in connection with the securitisation vehicle Aire Valley. I was also asked about the cost of the valuation process. The appointment of the valuer will be through an open competition. I am assured that that is the method most likely to produce an outcome that represents good value for money. In the case of Northern Rock, where the valuer appointed is from BDO Stoy Hayward, there is a fixed-cost arrangement in respect of the fee for the valuer. There are arrangements for other incidental costs as might be required in the carrying out of the valuer’s duties. I am sure that the valuer recognises the need to exercise caution there, but they must not be fettered in their ability to complete a thorough evaluation. The noble Lord, Lord Oakeshott, raised a number of questions on the Icelandic banks and has, through the Clerk, passed me a letter that I will ensure receives appropriate attention. I note what the noble Lord says about the replies he received to his Questions of 14 and 15 July. The FSA intensified its supervision of the Icelandic banks from the beginning of 2008. However, as a matter of good practice the FSA does not disclose its confidential negotiations with individual institutions. The Committee will, no doubt, be aware that my right honourable friend the Chancellor of the Exchequer, in the PBR statement, indicated his intention to write to the European Commission about issues arising in consequence of the experience of the Icelandic banks and the implications for the passporting under EEA arrangements; he has now done that. My noble friend Lord Campbell-Savours, who has asked previously about Icelandic institutions, drew attention to the reports issued during 2008 by the rating organisations Moody’s, Standard & Poor’s and Fitch. Those reports were, of course, available both in Iceland and elsewhere. He says that depositors should have been alerted by the announcements from those rating agencies, and I completely agree. Informed investors should have been taking those rating announcements into consideration in deciding whether they wished to continue placing deposits with Icelandic institutions. I note what my noble friend says about the paucity of information available on what is happening in Iceland. He also asked specifically about New Zealand bonds; I must confess that I will have to ask for further information on that matter, and will arrange for a reply to be sent to my noble friend.