Clause 61 - Memorandum of understanding: crisis management

Part of Financial Services Bill – in a Public Bill Committee at 9:45 pm on 20th March 2012.

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Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury 9:45 pm, 20th March 2012

We come back to the hon. Gentleman’s obsession with dominant figures preventing any dissent from emerging from an organisation. Not every institution works like that. It is clear from existing dialogues between the FSA and the Treasury, and between the Bank and the Treasury, that there is quite a lot of interaction at all levels. Whether we are talking about Ministers and the Governor and deputy governors, or Bank of England officials and Treasury officials, that engagement and openness are there, so the amendment is not necessary.

The hon. Gentleman seemed to suggest that the Bank of England means the Governor, but it does not; in the Bill, the Bank of England means the Bank of England. The question whether the use of public funds is appropriate is not a matter for the Governor’s personal opinion; that is completely irrelevant, because it is for the Bank to notify the Treasury of a risk. As clause 54 clearly sets out, it is the Government’s opinion that matters. As soon as the Bank is aware of a risk of circumstances arising in which the Government might reasonably be expected to consider it appropriate to use public funds, the Bank must notify the Treasury immediately. So it is not a matter of the personal opinion of a Governor or deputy governor. It is about whether they believe the Government might be reasonably expected to consider it appropriate to use public funds.

I noticed that the hon. Member for Nottingham East did not talk about this issue much in his winding-up speech on Second Reading, but he has suddenly been gripped by new enthusiasm. Perhaps he feels the need to please his boss at the moment, who I can imagine is a dominating figure who brooks no dissent.