Written evidence to be reported to the House
Banking Bill
4:40 pm
Jonathan Taylor: I very much agree with Angela’s general remarks on that. This is a point that has been raised a lot in our various representations. The Government are clearly trying to move in our direction because they recognise that the issue is a real one. The problem is that, as Angela says, unless legal firms are able to provide a so-called clean, unqualified legal opinion on these detailed netting arrangements, whenever the netting arrangement arises, it will cause a problem for the firms in relation to their regulators. Under the capital requirements directive, the firms will need to show their regulators a clean legal opinion to enable them to net the provisions for their capital purposes. There is a real problem there. That is why it is vital that the problem is addressed properly in the secondary legislation, which we have not yet seen.