Clause 140

Part of Banking Bill – in a Public Bill Committee at 11:15 am on 18 November 2008.

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Photo of David Gauke David Gauke Shadow Minister (Treasury) 11:15, 18 November 2008

The clause relates to the successful rescue of a bank and it applies if the bank administrator has pursued objective 2(a), which is the rescue of a residual bank as a going concern, and believes that it has been achieved. It also sets out various procedural matters. It appears that the decision as to whether a successful rescue of a residual bank has been achieved is left to the bank administrator and he will say, “We’ve made the decision. That’s it.” But what happens if the FSA or the Bank of England take a different view? Will the FSA and the Bank of England as a matter of course examine the rescue bank and if they feel that the threshold conditions have not yet been achieved, can they influence the bank administrator?

On the subject of successful rescue and the point at which a residual bank has been rescued, we have an example of how the system works in the case of Bradford & Bingley—as we have mentioned on a number of occasions—although I do not want to go into the case of the Icelandic banks. What progress is being made on Bradford & Bingley and does the Minister ever envisage that it could be rescued as a going concern? Does the Treasury expect that to happen and, if so, when?