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Clause 216

Part of Banking Bill – in a Public Bill Committee at 2:00 pm on 30th October 2008.

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Photo of Sally Keeble Sally Keeble Labour, Northampton North 2:00 pm, 30th October 2008

There may well be some issues that it will have to consider as a sub-committee, and I am sure it will want to work out some tools and some ways forward. At this stage, when do not have a clear definition—although we have a common-sense understanding—and when we are looking at what is frankly still an emerging phenomenon in the international financial markets and world economy, I do not want to say that this whole area, which is key to political decision making and to how the international community works, will be put at arm’s length in the way in which interest rates have successfully been. If there were one lever that could work in relation to international financial stability, we might want to use that, give it a tight policy remit and say, “We don’t want it to go above or below a certain level,” and set that out. The conceptual tools simply are not there and, in those terms, it is right to have a substantial sub-committee set up in this way, with a remit to deal with the matter, a reporting line and a much sharper focus. I certainly accept that the structures we had previously did not serve us well. The warning signs might have been there, but no one saw them. Action was not taken until the crisis started to ripple through from some of the financial institutions and the United States.

I think that we have the right structure here. It might not be the world’s most wonderful structure, but it is the right one for the present circumstances. It will be bolstered by the increasing focus on financial stability and the increasing pressure that I am sure there will be from Parliament and elsewhere to make sure that the structure delivers and that if there are warning signs, they are seen and acted on.