Clause 160
Banking Bill
3:15 pm
Ian Pearson (Parliamentary Under-Secretary, Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)
Let me try to shed light on the matter. Clause 160 inserts three new subsections into section 214 of the Financial Services and Markets Act 2000. The purpose of those provisions is to facilitate speedy payment of compensation to depositors or to facilitate the speedy transfer of their accounts to another bank under the bank insolvency procedure in part 2 of the Bill. Proposed new section 214(1A) allows the FSA to make rules to deem claims under the scheme to have been made. It will enable the scheme to begin processing the claims from the moment of default, rather than waiting for actual claims to be made. The claims process, especially when dealing with large volumes, will obviously take time so the sooner that it can begin, the better.
The hon. Member for Fareham talked about proposed new section 214(1C). It allows the scheme to deal with certain types of claim, without having to make calculations of individual claimants’ entitlements. The Government believe that that could help to speed up a bulk transfer of deposits under the bank insolvency procedure or the special resolution regime, which is why we sought to insert it into the clause.