Banks: EU Action

HM Treasury written question – answered at on 26 March 2015.

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Photo of Lord Stoddart of Swindon Lord Stoddart of Swindon Independent Labour

To ask Her Majesty’s Government, further to the Written Answer by Lord Deighton on 16 February (HL4632) concerning European Union regulations to break up banks in the European Union, whether they or the European Commission would make the final decision when any action was proposed against United Kingdom banks; and whether Parliament would be involved in any such proposals.

Photo of Lord Deighton Lord Deighton The Commercial Secretary to the Treasury

In order to address the systemic risk posed by UK banks, Parliament has legislated, via the Banking Reform Act 2013 (BRA), for such action to be taken through structural separation. This Act is to be implemented by the Prudential Regulation Authority. In the context of the ongoing negotiations on the proposed EU regulation for Bank Structural Reform, the Government is working to ensure that the BRA is maintained and that any other impact on UK banks is proportionate and kept to a minimum. It is the Government’s firm belief that banks should be supervised at the national level as local supervisors are best placed to understand the specificities of the national economy and its financial stability concerns. This is a critically important dossier for all Member States, in particular given the direct application of an EU regulation.

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