Clause 56 - Circumstances in which Treasury power of direction exercisable

Part of Financial Services Bill – in a Public Bill Committee at 8:30 pm on 20th March 2012.

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Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury 8:30 pm, 20th March 2012

We have, as the hon. Member for Nottingham East would expect, looked at the interventions that have taken place in the recent financial crisis to ensure that subsection (5) is as broad as is appropriate. Provisions such as

“the Treasury or the Secretary of State provide financial assistance to or in respect of a financial institution,” have been drafted as broadly as possible. They will cover actual financial support, contingent liabilities and guarantees. There is a huge breadth, even in subsection (5)(a).

The reason why the FPC has been excluded from subsection (5)(b) is that we do not expect it to be a micro-prudential regulator; it is a macro-prudential regulator. However, the FCA will be included as a consequence of the amendment that we have already discussed.

Subsection (5)(c) has been drafted in a way that is not exhaustive either. The clause has been drafted as widely as possible to capture any foreseeable set of circumstances.