Clause 179
Banking Bill
4:30 pm
Ian Pearson (Parliamentary Under-Secretary, Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)
The hon. Gentleman raises three points. The first is the question of whether the operator understands that he is operating a recognised system. As we explained when considering some of the earlier clauses, there is a process whereby the Treasury will establish that a system is a recognised system because it is of either systemic or system-wide importance. In the consultation exercise, we gave examples of those systems and it would be readily apparent to those who work in such areas that they are operating a systemic or system-wide inter-bank system.
The second issue that the hon. Gentleman raised related to the fact that the Bank of England already has a number of investigatory powers. The Bank has not previously had statutory responsibilities for the oversight of inter-bank systems. Under the clause, we are talking specifically about inter-bank systems and giving the power of inspection, if it is required, to the Bank.
The third point that the hon. Gentleman made was about the words
“otherwise co-operate with an inspector”.
I understand that the power is relatively broad. It will be used in a reasonable way by the Bank of England, just as we expect all our public institutions to operate in a reasonable manner. I do not think it unreasonable to put the power in the Bill.