Banking Reform

Anas Sarwar Excerpts

Thursday 14th June 2012 Commons Chamber

[Mr Hoban]

A number of countries have argued for the freedom to go further and impose higher capital surcharges—Switzerland is one and Sweden, which has introduced higher capital surcharges, is another. It is our responsibility to ensure that we protect the stability of the UK economy and the interests of the taxpayer, and respond to the structure of the banking system in the UK. Bank balance sheets in the UK are many times larger than our economy. We are much more exposed to risk. It is therefore right that we should take actions in the UK that help to protect the economy and the taxpayer, which is why we are introducing these proposals today.

[Anas Sarwar (Glasgow Central) (Lab)]

The Scottish Finance Secretary and the Scottish First Minister have said that if Scotland were to become a separate country, the Bank of England would remain the lender of last resort, while UK regulatory authorities would still oversee Scottish institutions. Can the Minister tell us what representations the Government have received from the Scottish Government and whether he is aware of any other EU country that does not have its own central bank or regulatory regime?

[Mr Hoban]

The hon. Gentleman raises an interesting question. There are some important questions to be answered about how the banks would be regulated if Scotland were to become independent. As I made clear in my response to the shadow Chancellor, a fiscal union needs its own system of banking supervision and its own resolution arrangements, and it is hard to see quite how things would work for an independent Scotland.