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Clause 196

Banking Bill – in a Public Bill Committee at 6:00 pm on 28th October 2008.

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“Authorised bank”

Question proposed, That the clause stand part of the Bill.

Photo of David Gauke David Gauke Shadow Minister (Treasury)

I thank the Minister for listing the various banks that supply us. It is one of those circumstances in which Wikipedia proved correct before the Committee. I thank her for providing clarification on what happens in mergers, which is topical and important. I have another question to ask, partly to provoke the hon. Member for Dundee, East. Were a bank falling within the definition of an authorised bank to relocate from Scotland or Northern Ireland to elsewhere in the United Kingdom, would it still be able to benefit from the provisions, or would it be disqualified from issuing banknotes?

Photo of Angela Eagle Angela Eagle The Exchequer Secretary, Member, Labour Party National Executive Committee 6:15 pm, 28th October 2008

The hon. Gentleman is right. Clause 196 defines “authorised bank” as it is used throughout part 6. Since the current legislation was enacted, as I hinted earlier, there have been restrictions in place governing note issuance by these banks. As I said earlier, the Bill modernises and strengthens the framework for note issuance, with a view to enhancing noteholder protection.

The hon. Gentleman asked specifically whether a bank relocating elsewhere in the United Kingdom would still be able to issue notes. If it moved elsewhere and relocated in the UK, it would still be able to benefit. It would not lose its authorisation on the grounds of relocation elsewhere in the UK. I hope that that answers the hon. Gentleman’s question about the definition of “authorised bank”.

Question put and agreed to.

Clause 196 ordered to stand part of the Bill.

Clauses 197and 198 ordered to stand part of the Bill.