Clause 168
Banking Bill
11:00 am
David Gauke (Shadow Minister, Treasury; South West Hertfordshire, Conservative)
I have two questions for the Minister. This is an interpretation clause and should not detain us for long. The clause relates to an inter-bank system. Subsection (1) refers to
“arrangements designed to facilitate or control the transfer of money between financial institutions who participate in the arrangements.”
I should be grateful if the Minister said a little more about money. We know that money includes credit, but the Bank of England publication, “Oversight of Payment Systems” from November 2000, states that
“‘money’ is regarded as cash (ie notes and coins issued by the central bank or government) and claims against credit institutions in the form of deposits.”
It continues:
“In the end, however, what is acceptable as ‘money’ is a matter of behaviour and the boundary could move.”
Does the Minister agree that money is a more flexible concept than it might first appear?
My second point is about subsection (5):
“A system is an inter-bank payment system for the purposes of this Part whether or not it operates wholly or partly in relation to persons or places outside the United Kingdom.”
That comes back to the territorial point that has been mentioned already. In order to fall within the regime, is it necessary for the operation of the payment system to be in the UK? Does it matter where the participants are? Is that the test? If so, this is a broad territorial test, and it could appear to cover any payment system anywhere in the world. I assume that the key point is the operation—where is that performed? If it is performed from the UK, will it be caught by the system so that it does not matter where participants are based?