Banking Reform

Baroness Kramer Excerpts

Monday 4th February 2013 Lords Chamber

[Lord Newby]

My Lords, I smile with amusement when the noble Lord accuses the Government of not taking this issue seriously. When his party was in his power, and we and I suggested to it and him that they do exactly that, we were told that it was irrelevant to the problems that we were facing and that we should definitely not do it. I will certainly not take any lessons from him about the importance of this issue.

As for whether the legislation should include reserve powers to implement full separation across the sector, this was put to the Governor of the Bank of England, who said that he did not want such reserve powers. More importantly, general reserve powers would give huge power outwith Parliament to tear up the provisions of the Bill as we envisage it, and fundamentally change some of the ways that we see it working. The Government think that if you got to the point where that was a possibility, or you wanted those powers, the appropriate way to do it would be to come back to Parliament, rather than leaving it to the regulator to exercise what would be very sweeping powers indeed.

[Baroness Kramer]

My Lords, I will not repeat the question on reserve powers. I have a feeling that this House will take it on if the Government do not.

May I ask a question about the competition aspects of the Chancellor’s speech? His comments were welcome but to be able to change from one bank to another when all those banks are essentially alike is not real choice. Will the Government look seriously at splitting up some of the major banks, especially those in which we have ownership? I have not read the Statement but can he comment on whether Chancellor or the legislation will allow the FPC to set the level of the leverage back-stop so that it could be higher than the rather modest levels proposed under Basel III?