Banking Bill — Committee (4th Day)

Part of the debate – in the House of Lords at 7:15 pm on 20th January 2009.

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Photo of Baroness Noakes Baroness Noakes Shadow Minister, Treasury 7:15 pm, 20th January 2009

We are now moving to much less exciting territory. Amendment 128 would insert a new clause after Clause 86 to deal with foreign bank branches.

We started our Committee consideration on the first day with a group of amendments where I sought to introduce asset-freezing provisions such as were used for the purposes of dealing with Landsbanki and Icesave deposits. Somewhat predictably, though disappointingly, the Government chose not to take the opportunity of accepting those amendments and complying with the report led by my noble friend Lord Newton of Braintree. That still leaves branches of foreign banks operating in the UK untouched by the Bill, which we do not regard as satisfactory. I have tabled a new clause after Clause 86 so that the Government can have the power to deal with the branches of foreign banks if they cause financial stability problems or otherwise need to be dealt with within the objectives set out in Clause 4. The drafting is modelled on the drafting for credit unions in Clause 86.

I appreciate that branches are not as easy to deal with as whole organisations such as credit unions, which is why it would be necessary to take a very broad power to achieve an acceptable result. The exercise of such a power may well raise issues under EU law, but that would apply when a power was used, not when it was placed on the statute book. It would also affect how it was used. I tabled this to ask the Government why they are not dealing with the branches of foreign banks in this legislation given that we know they have caused problems in the past and are likely to do so again. I beg to move.