Banking Reform

Steve Baker Excerpts

Thursday 14th June 2012 Commons Chamber

[Mr Hoban]

I know that the right hon. Gentleman has raised this matter on a number of occasions, and I am not going to give a different answer from those that I or the Chancellor have given before.

[Steve Baker (Wycombe) (Con)]

I congratulate my hon. Friend on the measures relating to bail-in and depositor preference in particular. However, I am sure he will remember that under the last Government the FSA came under political pressure. Will his measures deal with that and ensure that, in future, banks are resolved under the rule of law?

[Mr Hoban]

It is important that independent regulators exist and that their independence is credible. Going back to the FSA’s report on the RBS failure, it was interesting that the FSA clearly came under sustained pressure from the shadow Chancellor and the then Prime Minister to have a light-touch regulatory system, and we have seen the consequence of that. It is important that there are clear rules to ensure that regulators act independently and that their regulation is seen to be credible. The shadow Chancellor should recognise that he got it wrong when he called for light-touch regulation and championed it throughout the world.