Mandatory Reports to Be Made by Banks

Part of New Clause 3 – in the House of Commons at 7:45 pm on 15th July 1991.

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Photo of John Maples John Maples The Economic Secretary to the Treasury 7:45 pm, 15th July 1991

I have already dealt with the question of irregularities. I said that they were all related to loan losses, lack of financial controls, and the need for additional equity capital which was injected on every occasion on which it was required. The first hard evidence of fraud emerged in the Price Waterhouse inquiry, the report of which was delivered to the Bank of England on 27 June.

In my own mind, I am aware of no distinction between lending to a bank and making a deposit with it. I do not know what the treasurer of Westminster city council had in mind. I am responsible for many things, but not for what he says.

There were certainly additional injections of equity capital. I am not sure whether the hon. Gentleman's figures are right. There were several occasions on which additional injections of capital were requested and made.

It is not for me to comment on what the shareholders might have done if the restructuring had gone ahead. Additional injections of capital might have been made. However, the evidence of fraud was so pervasive and involved the senior management of the bank to such an extent that the regulators came to the conclusion that there was no way in which the management could be allowed to operate, whether additional capital was injected or not.

If there are points with which hon. Members think I have not dealt, I hope that they will write to me and I will seek to answer them. In the circumstances, I hope that they will feel that at this stage it is not in the interests of banking regulation to pass new clause 37.