Amendments of the Law (Resolution of Silicon Valley Bank UK Limited) Order 2023

Stewart Hosie Excerpts

Monday 27th March 2023 General Committees

[Stewart Hosie (Dundee East) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. The Minister certainly explained why the exemption is necessary, and what it was for: it allows HSBC to make £2 billion of liquidity funding available at below market rates. So far, so good. I will put on record that all involved did an extraordinary job over a weekend to resolve this difficulty, and that was absolutely the right thing to do.

The explanatory memorandum and the Minister have both mentioned a subsequent SI that will extend the exemption from ringfencing beyond four years. I have a similar question to that asked by the Labour Front Bencher, the hon. Member for Hampstead and Kilburn. The ringfence was introduced—I am sure that many remember the circumstances—to stop investment banks using retail deposits as a piggy bank, and then losing all those deposits at the casino. While it may be necessary to extend the exemption beyond four years, will it be possible to shrink that period? Could there be a return to ringfencing within four years? What supervision or action is there by the PRA, the Treasury and others to ensure that SVB UK maintains its capital, and its ongoing work in the area of retail deposits and commercial and investment lending, and to ensure that it does not seek to extend its risky investment lending, and to use retail deposits for that, beyond these four years?