Clause 179
Banking Bill
4:30 pm
Ian Pearson (Parliamentary Under-Secretary, Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)
Clause 179, as Members have outlined, gives the Bank of England the power to appoint inspectors whose role is to inspect the operation of a recognised inter-bank system. It is relatively straightforward and is the first of a number of clauses in the enforcement section of part 5. It places the operator of the system under a statutory obligation to grant the inspector access to the premises from which all or part of the system is operated or managed and to co-operate with the inspector.
The power allows the Bank of England to appoint an inspector to check that codes of practice, principles, system rules or directions are being complied with and that the recognised inter-bank payment system is otherwise operating in a satisfactory manner. The power is an important tool of oversight that strengthens the Bank’s ability to ensure that payment systems identified as of systemic or system-wide importance are being operated in a manner that does not pose a threat to business or other interests, or to financial stability in the United Kingdom as a whole.
The hon. Member for South-West Hertfordshire asked whether the power would be routinely used. I am happy to confirm that we do not anticipate that it will be routinely used. We expect that if the Bank of England had any concerns about the operation of an inter-bank system it would discuss them in the first instance with the operator concerned. In most, if not all cases, I imagine that things would be sorted out. However, given the importance of oversight of those critical systems, I think it right that there are powers for inspection, so the later powers that we shall discuss are in reserve.