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Clause 138

Banking Bill – in a Public Bill Committee at 11:00 am on 18th November 2008.

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Property transfer from bridge bank

Photo of Roger Gale Roger Gale Conservative, North Thanet

With this it will be convenient to discuss Government amendments Nos. 168 to 174.

Photo of Ian Pearson Ian Pearson Parliamentary Under-Secretary (Economic and Business), Department for Business, Enterprise & Regulatory Reform, Economic Secretary (Economic and Business), HM Treasury

The amendments are of a technical nature. They provide for two things. First, amendments Nos. 167 to 172 clarify some of the terms used in the clause in relation to “original bank” and “onward transferee”. Secondly, amendments Nos. 173 and 174 provide for an added level of flexibility in relation to onward property transfers from a bridge bank. Where an onward property transfer is made from a bridge bank to a transferee, it may require services from the original residual bank—clause 138 already provides for that—but it may also require services from the bridge bank. This is because some of the facilities may have been transferred from the residual bank to the bridge bank. These may be necessary to operate the business transferred from the bridge bank.

Amendments Nos. 173 and 174 provide that both the original residual bank and the original bridge bank may provide services to business transferred from the bridge bank. These are sensible amendments, which ensure that the bank administration procedure is effective for additional resolution scenarios.

Amendment agreed to.

Amendments made: No. 168, in clause 138, page 75, line 7, after ‘bridge bank’ insert ‘(“the original bridge bank”)’.

No. 169, in clause 138, page 75, line 10, after ‘bridge bank’ insert

‘to a transferee (“the onward transferee”).’.

No. 170, in clause 138, page 75, line 11, leave out

‘transferee under the onward property transfer instrument’

and insert ‘onward transferee’.

No. 171, in clause 138, page 75, line 13, after first ‘the’ insert ‘onward’.

No. 172, in clause 138, page 75, line 15, leave out

‘bridge bank under the original property transfer instrument’

and insert ‘original bridge bank’.

No. 173, in clause 138, page 75, line 17, leave out subsection (3) and insert—

‘(3) In any other case, the Bank of England may determine that the original bridge bank is to be treated as a residual bank for the purposes of this Part.

(3A) Where the original bridge bank is put into bank administration in reliance on subsection (2)(b), Objective 1 shall apply in accordance with section 125(4) in relation to both—

(a) services provided by the original bank to the original bridge bank, and

(b) services provided by the original bridge bank to the onward transferee.

(3B) Where the original bridge bank is put into bank administration in reliance on a determination under subsection (3), Objective 1 shall apply in accordance with—

(a) section 125(3) in relation to services provided by the original bridge bank to the onward transferee, and

(b) section 125(4) in relation to services provided by the original bank to the original bridge bank.

(3C) But the Bank may determine—

(a) that subsection (3B) does not apply, and

(b) that section 137 shall apply as if the Bank had given—

(i) an Objective 1 Interim Achievement Notice in respect of the original bridge bank, and

(ii) a notice under section 137(1)(b) in respect of the onward transferee.’.

No. 174, in clause 138, page 75, line 22, leave out subsection (4).—[Ian Pearson.]

Clause 138, as amended, ordered to stand part of the Bill.

Clause 139 ordered to stand part of the Bill.