Clause 223
Banking Bill
2:45 pm
Mark Hoban (Shadow Minister, Treasury; Fareham, Conservative)
The clause removes the requirement established by the Bank Charter Act 1844 that the Bank of England must produce a weekly return of accounts. My understanding is that, following the passage of this change, the Bank will be able to determine whether, and in what form, it produces a return.
My understanding is that the genesis of this change was the debate that took place around Northern Rock last year. There was some debate about whether Northern Rock could have been saved if there had been a less transparent process. A great deal of that argument rested on the market abuse directive, whether a consortium of banks could pull together to buy Northern Rock, and a whole host of arguments around that. That is not necessarily germane to the amendment, but one argument made at the time was that the Bank of England’s weekly return would disclose financial assistance given to a bank, which might trigger awareness in the market of a bank receiving financial support. Hon. Members may recollect that it was the Governor’s announcement that Northern Rock was in receipt of support from the Bank of England as a lender of last resort that triggered the run on the bank.
The Government consultation response stated that there had been support for the change, but the summary of consultation responses suggests that very few people responded to the proposal to withdraw the weekly return. Can the Minister elaborate on what the alternative mechanism for reporting the Bank of England’s assets and liabilities might be? Is there widespread support for it? It appears to have generated relatively little interest in the consultation.