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(4A) Subsection (4)
(a) overrides a contractual or other requirement to keep information in confidence, and
(b) is without prejudice to any other power to disclose information..
The clause enables the authorities involved in the regulation of payment systems to obtain and share information effectively. Subsection (4) allows the Bank to disclose information obtained under the clause to the Treasury and the FSA, and their international counterpartsthe European Central Bank and the Bank for International Settlements. It also gives the Bank the right to publish information obtained under powers conferred by the clause.
The amendment inserts an additional provision to ensure that the Bank may share information obtained under the clause with those authorities, notwithstanding any contractual or other confidentiality obligations in place, and without prejudice to other disclosure powers. The Committee will be aware that the gathering and sharing of information between domestic authorities and their colleagues in overseas authorities plays an important role, and will play an increasingly important role in informing and co-ordinating international regulatory activity, both to pre-empt and to address problems in financial markets. Similarly, the sharing of information plays a fundamental role in the framework governing the formal oversight of payment systems.
Therefore, it is vital that the Bank of England should be able to share information obtained under this section, notwithstanding any contractual or other confidentiality requirements, in the interests of financial stability, among other things. Accordingly, the amendment is appropriate in order to provide a statutory gateway for the Bank of England to share information.
It is appropriate to note that similar gateways are available to other public authoritiesfor example, the FSA and the Competition Commissionwhich may, in some circumstances, disclose confidential information without seeking the consent of the person from whom the information was obtained.
It is important to note that the provision means that the common law of confidentiality can be overridden. However, the power will, of course, be exercised by the Bank of England in a way that is compatible with the safeguards set out in the Data Protection Act 1998 and the Human Rights Act 1998. The amendment is equivalent to the provision in clause 224(3), which relates to information that is relevant to the financial stability of an individual financial institution, or one or more aspects of the individual systems of the UK, which may be shared with the FSA or the Treasury. I commend the amendment to the Committee.
Will the Minister clarify two brief points? The use of the word share seems to indicate that information will be provided on a reciprocal basis. Conversely, can the Minister confirm that should it not be reciprocalin other words, if the other countrys FSA, Treasury or similar organisation were not willing to provide reciprocal information to usfrankly, we would not provide information to them? Sharing means genuinely sharing things, not just our side disclosing to someone else.
Secondly, can the Minister confirm whether disclosure would include the personal details of individual organisations and persons in respect of payments that may or may not have been made to them through the system on which information is being shared?
As regards the Government amendment on overriding confidentiality, I would like to reinforce the point that the hon. Member for South-East Cornwall made. I do not think that information that is being shared under subsection (4)(c) with an overseas authority similar to the Bank of England, the FSA or the Treasury should be shared unless there is a similar agreement from that organisation. I would like the Minister to give an assurance that information will be shared only if we have that co-operation from overseas.
I am happy to explain that, in normal circumstances, we expect there to be reciprocal arrangements with the international partners with which we co-operate. As I mentioned when introducing the amendment, we are talking about the European Central Bank and the Bank for International Settlements. We think that it is right to have such arrangements with them. If we think that it is appropriate in the interests of financial stability to share information, even if the arrangements are not reciprocal, we should do so, because we all share an interest in financial stability. However, I have absolutely no reason to believe that the European Central Bank or the Bank for International Settlements would not want to share with us information that they believed was important to global financial stability.
We accept the point about the European Central Bank and the Bank for International Settlements, but paragraph (c) refers to other Governments and organisations in other countries. It is a blanket thing. Are the Government saying that we will share this information regardless, or will we require the other country to participate as well and share information with us?
It is important to be clear that we are talking about a narrow and exceptional set of circumstances. If the Bank of England has information that it believes is of importance to the stability of the financial system, the right and responsible thing to do is to share that information. Likewise, if an authority from another country was in a similar position, we would expect it to want to share that information as a matter of course.
On the question of sharing personal details, I want to repeat that the Bank of England is subject to the Data Protection Act and must abide by data sharing principles which confer particular protections with regard to personal information. It must also act in accordance with its obligations under the Human Rights Act, particularly article 8, and have regard to the right of protection of private and family life. There are a lot of safeguards there and in the very unlikely eventuality that information which threatens the financial stability of the system comes to the attention of the Bank, the responsible thing to do is to share that with our international partners.