Clause 232
Banking Bill
3:30 pm
Angela Eagle (Parliamentary Secretary, HM Treasury; Wallasey, Labour)
I should like to take a little time to explain that. The clause enables the Government to make future regulations relating to financial collateral, which is a key underpinning of modern financial markets. It is a way to allow collateral takers to borrow at more advantageous rates than otherwise and is a key risk management tool in credit risk. That is why it is relevant.
The power is retrospective as regards the current scope of the regime. This is a contingency measure in the light of a potential legal challenge to the power to make existing regulations. It is a retrospective power that could not be used outside the current scope of regulations other than to provide for matters following from a situation where the existing regulations were to be quashed. This is a relevant piece of activity which relates directly to financial collateral which underpins modern financial markets, so it is an important aspect of what we are discussing today.