Banking (Special Provisions) Bill

I will send the noble Earl, Lord Ferrers, a note containing a list of all the banks that have been nationalised in this country, at the top of which will be the Bank of England in 1946. The amendment is irresponsible for the reasons outlined by the noble Lord, Lord Bilimoria. This is an unprecedented situation because of the growth of the credit markets, their role in banking and the way they have developed over the past 10 years. Because of that, the wholesale financing of banking is today quite different from what it was when, for example, the noble Lord, Lord Lawson, was Chancellor of the Exchequer. The situation has fundamentally changed. That qualitative change has led to a massive quantitative change of the exposure in credit markets which can occur if a financial institution fails. That is why, for example, the Bank of England cannot use its own resources, as it traditionally has in the past, to take institutions into public ownership; the scale is so great. That is why this measure is necessary. The noble Lord, Lord Forsyth, asked whether there was any other institution the Government expected to be in crisis—a very irresponsible question, I suggest. The main point is that financial crises appear out of clear blue skies; they are always unprecedented and they always have characteristics which have not been anticipated. That is why it is important that, until the legislation anticipated by the noble Lord, Lord Newby—which has been discussed by the Front Bench and is now under consultation—is available, we have these powers on the statute book to ensure that rapid action can be taken should, God forbid, there be a similar circumstance.