Banking Reform

Gregg McClymont Excerpts

Monday 4th February 2013 Commons Chamber

[Greg Clark]

One of the principal innovations was to get rid of the shadow Chancellor who was then in a position to interfere. The reason we are setting up the system and giving powers to the Bank of England and the regulator is to make it very clear that any bank that breaches the rules can forget about lobbying Ministers. The banks will be responsible to the Bank of England, which will enforce the law that I hope this House will see fit to pass.

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

Let me take the Minister back to the question posed by my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), who is a member of the banking commission. In simple language, what possible reason do the Government have for not accepting the commission’s recommendation to take that reserve power? After all, only banks that do not conform with the Government’s wishes would have anything to fear from the reserve power. Why not go on and take that power?

[Greg Clark]

I have explained on a number of occasions why we have not done so. One reason is that the regulator does not want that power, and a second reason is that it seems to us more appropriate that individual banks feel the consequences of their breach. The system itself does not have a mind to breach the rules; it is individual banks that do so. It is thus appropriate for the sanctions to apply to individual banks.