My Lords, there has been consultation on these clauses already. These clauses, which were published last month, have not been put forward in some huge rush; they have been put forward with due speed to reflect the seriousness of the situation that the LIBOR scandal revealed. Yes, there are hundreds of billions of dollars-worth of contract relying on LIBOR, but many other very important equity market and other indices, in the UK and around the world, have functioned successfully for many decades. I have no doubt that as well as accounting firms and others, people who provide indices in other contexts—those who provide market data and who support market infrastructure—would be the sorts of entities that would be well suited to be the administrator of this important benchmark. There are many other critical functions of price discovery out there which are wholly run by private sector entities, albeit regulated under FiSMA in the UK, so we should not make a great drama out of this. The FCA will be regulating this activity, including the performance of the specified person.
The noble Lord, Lord Eatwell, asked perfectly reasonably about what happens if somebody is not performing and does not want to give it up. Because the administration is proposed, subject to the secondary legislation passing, the administration of LIBOR will become within regulation. If the administrator is not performing, therefore, the regulator—namely, the FCA—can take regulatory action in appropriate cases, which could include removing permission to act, if appropriate.
5.30 pm