Financial Services Bill

I wish to make the same point as the noble Lord about being too big to manage. It has become apparent in recent years that not only large conglomerates but many financial companies and banks that have gone global have not necessarily always faced up to the different cultures and regulatory requirements in other countries. They have become physically too big to manage, and this is a dangerous area. On the idea of splitting the banking system into two parts under some kind of revived Glass-Steagall, this issue will come to a head when regulatory authorities reach the stage where they will define and require higher capital to support racier activities. It is not an immediate issue but it will become critical. As the noble Lord, Lord Newby, mentioned, we discussed the practicalities of this at Second Reading. I was interested in what my noble friend Lord Blackwell said about having joint subsidiaries of a bank holding company, but I do not know whether that would give the security of separation that is needed in this situation. The issue of having a firewall between two separately managed businesses—which is basically what it would be—has not been addressed and I have yet to hear anyone make a convincing argument about how you could put a firewall between the two. This may come, but the timing of it will be influenced by the regulatory background and when the regulators reach the point where they have identified the levels of the capital backing needed in the separated part of the business which contains the more adventurous activities.