It may be convenient for the Committee if I speak to the whole of the group rather than just to the initial amendment. My noble friend has been kind enough to say that I wish to raise a debate about the principle of investment banks and commercial banks, and he is right. In introducing this new definition of investment banks, he said that it was for the purposes of insolvency legislation only. Parliament is perfectly entitled to rewrite the definition and the basis on which it is intended.
I would like my noble friend to address the problems that I addressed on Second Reading. First, it is very difficult to see how the taxpayer could compensate investment bankers who have been dabbling in securities. It is easy to see how we can compensate commercial banks—high-street banks—with taxpayers' money, but I find it difficult to see how the taxpayer could properly compensate people who have lost money dabbling in what I would call something of a casino. The recent takeover of Merrill Lynch by the Bank of America, in which Merrill Lynch exposed some extraordinary losses, has made that point.
Secondly, although I do not want to repeat all that I said on Second Reading, I want to reiterate that commercial banking and investment banking involve different skills. I have been involved in both, and I know that. It may be time to get back to a bit of sense whereby commercial bankers say that they are commercial bankers who do not dabble in securities and investment bankers say that they run securities businesses and do not go on to the high street collecting deposits from the public.
My amendments address the question of the definition of an investment bank. Amendment 174DA relates to underwriting securities, Amendment 174DB addresses foreign investment banks which may or may not be incorporated under UK law, and the other two amendments make it clear that a bank as defined under Clause 2 cannot wholly or partially own an investment bank, so that the two operations are completely separate.
I recognise that my drafting is not perfect and that it would require time, effort and study to get from where we are now to where I would like to be. I therefore have a good deal of sympathy with Amendment 203, tabled by the noble Lord, Lord Newby, which requires a review after a period of time. However, if my noble friend is saying, as he did on Second Reading, that the Bill is meant to be a permanent Act for the regulation of the banking industry—and I do not think that we will get another Banking Bill for a few years—then it needs to include a provision to enshrine the principle that investment banks and commercial banks are different animals. We should make provision to that effect.