Clause 2
Banking Bill
11:30 am
Ian Pearson (Parliamentary Under-Secretary, Department for Business, Enterprise & Regulatory Reform; Dudley South, Labour)
I beg to move amendment No. 87, in clause 2, page 2, line 28, at end insert—
‘( ) Where a stabilisation power is exercised in respect of a bank, it does not cease to be a bank for the purposes of this Part if it later loses the permission referred to in subsection (1).’.
This is a technical amendment, which makes it clear that the provisions of part 1 continue to apply to banks in respect of which stabilisation powers have been exercised, even should such banks lose their regulatory permission to accept deposits under the Financial Services and Markets Act 2000.
An example of where that scenario could be material is as follows: as we will discuss when we come to clause 57, the expression “residual bank” is used in subsection (1) of that clause to impose continuity obligations between a residual bank and a transferee. It is highly likely that a residual bank will have been placed in the new bank administration procedure, and in such circumstances the residual bank would no longer have a valid deposit-taking permission. The amendment would prevent the argument from being made that a company without a deposit-taking permission is not a bank, and hence not a residual bank within the meaning of clause 57(1).