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Clause 7

Part of Banking Bill – in a Public Bill Committee at 9:45 am on 6th November 2008.

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Photo of Mark Hoban Mark Hoban Shadow Minister (Treasury) 9:45 am, 6th November 2008

I think that the hon. Member for Northampton, North is alluding to the lack of clarity. The Bill is actually quite straightforward in that it offers the possibility of pulling the trigger and deciding on the stabilisation options. In that respect, there is a clear legal process. However, the implementation of the measure is more sophisticated, because there will be a debate or dialogue between the tripartite authorities about the problem bank. There could be a situation in which the Bank and the Treasury decide that they cannot use the stabilisation powers because they do not think it appropriate. Their conclusions will inform a decision by the FSA to pull the trigger. Effectively, they will have a veto over the trigger, but the Bill suggests that they would not have such a veto. There is a tension between the practical ways in which the powers will be exercised and the legal form. Actually, the practical implementation gives rise to some of the uncertainty and concerns that people have about how the tripartite authorities operate, particularly in the context of a situation such as Northern Rock.