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(c) an authority in a country or territory outside the United Kingdom which exercises functions similar to those of the Treasury, the Bank of England or the Financial Services Authority in relation to financial stability;
(d) the European Central Bank..
The amendment strengthens clause 224 by permitting the Bank of England to share information related to financial stability with overseas partners, as well as with other members of the tripartite. It is right and proper that the Bank of England should have expanded powers to share information both across the tripartite and with overseas partners, when appropriate.
The amended clause would enable the Bank to share relevant information that it has received in relation to its financial stability functions. Typically, the Bank of England receives information from the FSA, which it can share among the tripartite. However, it is possible that the Bank might receive information from other sources, such as an institution administered under the special resolution regime or from other institutions that may approach the Bank directly.
At present, when the Bank of England has received confidential information from a third party, it may not be able to share it. In an emergency, under current rules it might face uncertainty about precisely which information it can legally share with other authorities. Clause 224 takes away that difficulty by enabling the Bank of England to share any information that it has received with other authorities. That removes any complexity or uncertainty that might arise in fast-moving situations and will enable the authorities to act more effectively in an emergency.
The amendment builds on the clause by enabling the Bank of England to share such information as it deems fit with overseas agencies that perform functions similar to that of the Bank, the Treasury and the Financial Services Authority. In a globally connected world where the financial marketplace is interconnected, the United Kingdom needs to be able to co-operate and share information effectively with other jurisdictions, particularly in the case of concerns about large cross-border firms. I can assure members of the Committee that there is no intention that the power should be used lightly by the Bank of England, or that it would disclose information unless it was necessary. However, it is appropriate that the Bank of England should have the power to share information on major issues of financial stability with our overseas partners.
I want to ask the Minister two questions. Is there a parallel ability for the FSA to share information with comparable overseas institutions? Given that there is a lot of discussion about colleges of regulators supervising individual institutions, and bearing in mind her reassurance that such information will not be transferred lightly, how will that reassurance work with the prospect of much more information sharing through colleges of regulators?
Obviously, it is in the UKs interest that there is full international co-operation on financial stability, and I suspect that we are just at the beginning of a process that will strengthen arrangements globally to ensure that that happens, particularly when a firm of systemic importance to the UK is internationally interconnected.
It is important for us to be able to inform overseas partners so that regulators can co-operate in managing the difficulties associated with the firm in question. It is desirable that other regulators and central banks reciprocate. The UK authorities maintain excellent relationships with key counterparts overseas. The colleges of regulators, which the hon. Gentleman mentioned, are an evolving example of the strengthening of that reciprocal relationship.
The hon. Gentleman asked whether the FSA can share information. Yes, the Financial Services and Markets Act 2000 includes the power for the FSA to share information with overseas regulators within limits set by the Treasury. That all helps to enable regulators to pick up systemic problems, particularly in firms that are globally present, interconnected and of systemic importance in the UK or elsewhere.