Financial Services Bill

Amendment 33 would require the FSA to have regard to the proceedings of the Council for Financial Stability when considering its financial stability objective. I can agree with the spirit of the amendment but I do not believe that it is necessary. The Government are creating the Council for Financial Stability precisely to be a forum for effective co-ordination between the authorities responsible for financial stability. Clause 1(3) is clear that the council has to monitor and co-ordinate, and paragraph 17 of the terms of reference clearly specifies that the council will consider the financial stability strategies of the FSA and the Bank. I am confident that the FSA, like the Bank, will work in close partnership with the other authorities in the work of the council. For this reason, we fully expect the FSA to take due account of the council’s discussions and that the actions of all the authorities will be informed by the views, actions and approach of other council members. In addition, paragraph 26 of Schedule 2 to the Bill amends Section 354 of FSMA, which concerns the FSA’s duty of co-operation. Paragraph 26 will extend this duty by adding a new subsection which states: ""In pursuing its financial stability objective, the Authority must take such steps as it considers appropriate to co-operate with other relevant bodies (including the Treasury and the Bank of England)"." Therefore, nothing would be gained by adding the proceedings of the council to the list of matters to which the FSA must have regard. I therefore invite the noble Baroness to withdraw her amendment.