Banking Bill
10:56 am
Ian Pearson: I think there are a number of different points. First, on what my hon. Friend calls the strike of capitalism, which we tend to call inter-bank lending, the Government have provided £250 billion to support inter-bank lending. We believe that we will make a difference and we are already seeing a reduction in LIBOR rates. So there is an indication that this is working. Clearly, the operation of this special resolution regime only happens in exceptional circumstances. We hope that the legislation that we will discuss in detail in due course will never have to be used, but it is important to have that framework of legislation in place so that we can take decisive action and give a framework of confidence to banks and building societies as well for the future.
The other point that I would want to make is about the enhanced role that we are giving to the Bank with regard to financial stability. We see that as being an important part of the Bill. The Bank has always played a role in financial stability, but the proposals in the Bill build on what is done to date and provide it with a high-level statutory responsibility for contributing to the maintenance of financial stability. We see that as one of the ways in which we can say that we have learnt lessons from recent events and are building a more robust system for the future.