Banking Reform

Lord Sharma Excerpts

Thursday 17th June 2010 Commons Chamber

[Mr Hoban]

It is clear that if the Bank of England had not lost its power to monitor and act upon the level of debt in the economy, it might have been in a position to consider what was happening in the housing market, to consider the role that Northern Rock played in fuelling the asset-price bubble and to take action to cool that down. The only person who tried to rule out boom and bust in the past was the right hon. Member for Kirkcaldy and Cowdenbeath.

[Alok Sharma (Reading West) (Con)]

Does my hon. Friend agree with the Governor of the Bank of England’s assessment that there was little real reform of banking regulation under the last Government, and that the Opposition should therefore welcome the measures that we are setting out today?

[Mr Hoban]

I hope that the Opposition will welcome the measures, but their views were not very clear from what the shadow Treasury spokesman said. In the past three or four years, when we have debated the reform of parts of the banking regulation sector, the problem has been that the then Government were unable to engage in the fundamental debate about whether the architecture was right. They failed to address that question, and that led to a new Government addressing that question and putting things right for the first time.