Angela Eagle
Main Page: Angela Eagle (Labour - Wallasey)Department Debates - View all Angela Eagle's debates with the HM Treasury
(1 year, 5 months ago)
Commons ChamberMy right hon. Friend, who does such good work for the science and technology community through his Committee, is absolutely right. The technology and life sciences sectors want our Government to be joined up and decisive, and to remove unnecessary regulations, while still operating in a high-quality regulated environment. We now have the opportunity to go a lot further—to deliver the Edinburgh reforms and to combine our aspirations to be a science superpower with the ferocious financing strength that we have here in the United Kingdom.
I commend the quick and effective action. However, although the collapse of SVB in America was partly due to liquidity issues, there is also the issue of the changes that were made to the threshold at which banks are considered systemically risky, which increased from $50 billion to $250 billion. That meant that SVB could continue in America without the very focused regulation that might have spotted this problem earlier. Does the Minister think that the Edinburgh reforms present any similar risks, and will he say a little about the exemption from ringfencing that he announced today for HSBC? Is he content that that does not present any risks either?
I must be very careful not to comment on matters as they relate to the United States. SVB UK was a separate bank. It was regulated here, and it was as a result of that regulation, and the fact that we have taken back control of our financial regulatory rulebook, that we were able to act so decisively. The hon. Lady will forgive me if I do not talk about matters in the United States.
In respect of ringfencing, it was the view of the Bank of England and the Treasury, in the circumstances and to protect public funds, that to provide a permanent exemption for what is a very small part of the much larger HSBC—I think less than 1% of its pro forma clients on an enlarged basis will be former Silicon Valley Bank clients—was appropriate. I do not think it puts inappropriate levels of risk in the system. By streamlining the rulebook, and by bringing back control and dispensing it to UK regulators, with accountability to Parliament—she will know about that through her membership of the Treasury Committee—I think we can have better regulation and deliver better outcomes for the sector.