Regulatory and Banking Reform

Philip Hollobone Excerpts

Thursday 16th June 2011 Commons Chamber

[Mr Hoban]

The package of proposals that the Independent Commission on Banking is developing is aimed at tackling that. It is one of the reasons why it proposed a retail ring-fence and increased capital so that the ring-fenced retail business will continue to be strong. But we need to make sure that we have the right resolution tools in place in the event of a bank failure. I commend the previous Government for their introduction of the special resolution regime, to which I referred in my statement in the context of Southsea Mortgage and Investment Company Ltd. We need to continue to work on tools that will help us resolve a bank failure without the taxpayer having to pick up the bill. That is the position that we ought to be in.

[Mr Philip Hollobone (Kettering) (Con)]

My constituents in Kettering want to know that the household savings that they have deposited in their local high street bank are safe from financial speculation and that never again will large banking groups imperil the UK economy through unsustainable banking practices. How far does the Minister’s statement today go to reassure my constituents?

[Mr Hoban]

My statement today has demonstrated the action that we have taken over the past year to create a more stable and sustainable banking system. That should give comfort to my hon. Friend’s constituents in respect of the safety of their savings. Savers and depositors should be mindful of the limits on deposits imposed through the financial services compensation scheme, but the range of interventions that we are making, through this statement and further reforms, will ensure that we have a safer, more sustainable banking sector in the future—one that does not impose a burden on the taxpayer, but makes sure that it continues to meet the needs of businesses and households across this country.