Independent Commission on Banking

Lord Stewartby Excerpts

Monday 19th December 2011 Lords Chamber

[Lord Sassoon]

My Lords, the report today is a response to the Vickers commission’s work on the structure of banking. I fully accept the noble Lord’s reference to other matters, particularly accounting standards. The committee of this House did some extremely important work in that area. I do not pretend that we are solving everything today and accounting is another issue that I am sure Members of this House will not forget as we go forward.

[Lord Stewartby]

My Lords, will my noble friend say something about supervision and where it fits into this very complicated arrangement of new committees and authorities? The report of the Joint Committee, which was published only today, states that it is planned that microprudential regulation will be done through a new subsidiary body called the prudential regulatory authority. However, regulation is not a micro-activity. Supervision is a micro-activity, but regulation is not. If microprudential regulation is meant to refer to supervision, it would be better to say so and not to put it in that form of verbiage.

[Lord Sassoon]

My Lords, I am sure that there will be other occasions and places in which to discuss the Joint Committee’s important report on the Bill, so I do not want to get dragged too far into doing that. I recognise that, even for those of us who have been involved in the banking industry, confusing “regulation” and “supervision” can sometimes be a trap into which it is easy to fall. Supervision will be the responsibility of the Bank of England in the new structure, if the Bill is passed by Parliament.