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Clause 1 - Deputy Governors

Part of Financial Services Bill – in a Public Bill Committee at 12:30 pm on 21st February 2012.

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Photo of Mark Durkan Mark Durkan Shadow SDLP Spokesperson (International Development), Shadow SDLP Spokesperson (Work and Pensions), Shadow SDLP Spokesperson (Foreign and Commonwealth Affairs), Shadow SDLP Spokesperson (Home Affairs), Shadow SDLP Spokesperson (Justice), Shadow SDLP Spokesperson (Treasury) 12:30 pm, 21st February 2012

The Minister has just made the point that there are very clear, distinct roles for the three deputy governors. I want to return to the adequacy of the information available, the enhancement of information standards in the financial system, the information available to the regulators in particular, and the information and intelligence available to the Bank of England. The US Dodd-Frank Act anticipated those issues and created the Office of Financial Research. There is no equivalent provision in the Bill, and perhaps the Minister will assure us that one of the deputy governors will be responsible in practice for such oversight.

In its report, the Joint Committee on the draft Bill stated:

“The Bill should be amended to place a duty on the Bank of England (or its subsidiary the PRA) to develop information standards for the UK financial services industry and to report regularly on progress in improving these information standards in order to support financial stability.”

Even in that recommendation, which has not been reflected in the Government’s amendments to the Bill, there is a reference to the Prudential Regulation Authority, so perhaps it will be the deputy governor for prudential regulation who will pay particular regard to that need; but there is also a reference to supporting financial stability, so perhaps it will be the deputy governor for financial stability. It would help if the rules were clear, and if we knew which it would be. That is not indicated anywhere, and given the absence of provisions elsewhere in the Bill, it is relevant, as we are scrutinising clause 1, to ask the Minister to enlighten us in that regard. As things stand, the Financial Policy Committee, which we have not yet discussed, will not be in a position to make the necessary judgments or activate the necessary interventions.