My Lords, in taking advantage of the gap I know that I must be brief, but I hope that noble Lords will forgive me if, as a member of the sub-committee on financial services, I underline the point that has now been several times that it is very important that we have a single organisation to represent the UK's thoughts on financial regulation in Europe, and a committee to do that seems to be imperative. My second point concerns the use of the emergency powers that could see European organisations overriding national regulators. This should occur only in extremis. The noble Lord, Lord Harrison, has acknowledged that there are restrictions on when these powers could be used, but quite rightly his report also noted the comment by the FSA that,
"only time will tell whether in practice those restrictions prove to be sufficient".
Given the EU's constant efforts to extend its reach, a degree of wariness on this point seems justified. The Government, in their response to the committee's report, said their expectation was that the calling of an emergency would not be a common event. Well, emergencies seem to have been quite common of late so we should not rest our guard on the principle that national regulators must remain in the driving seat.
That takes me to my next point concerning the current arguments over the capital requirements directive. This is the EU legislation intended to bring in the higher capital requirements detailed in Basel III. At the height of the financial crisis, when the G20 was trying to map out a route to greater financial stability, those requirements appeared to be setting a limit below which banks should not be allowed to go. Now, however, there are some in Europe who take another line. They are of the view that the capital requirements directive should be seen as declaring a maximum level of capital requirement. This would scupper Britain's plans for implementing the Vickers report and so Britain is holding out against maximum harmonisation. The noble Lord, Lord Newby, tells us that we have nothing to fear on this front; that the argument is won already. Personally, I feel that we should remain vigilant until we know that the argument is won. Would it be entirely surprising if that thought had influenced the Prime Minister when he wielded the veto? I believe that separation of the banks is something worth fighting for. We are now all too well aware of the havoc that can be caused by a cavalier financial sector. If the UK judges that it needs more caution from our banks than some countries wish to impose on theirs, it should be our right to do so.
Finally, I would like to make a point about bank accounts. Bank accounts, as far as I am concerned, have become so complicated that they serve to mask the true situation rather than to unveil it. That is why, although we have already had comment on the ratings agencies, it is worth remembering that the banks were all given a clean bill of health in this country by their accountants and auditors. It seems to me that one of the useful things the new EU regulatory organisations could do is take another look at bank accounts and accounting standards and the auditors who police them because they probably are no longer fit for purpose.