John Gilroy (Labour)

The section states that "The Bank may, after consultation with the Minister, issue a code of practice ...". While that is a good thing I notice that the equivalent Act in the UK, which is self-proclaimed to be ahead of international best practice, does not have a role for the Minister in any of this. The reporting takes place between the Bank of England and the Financial Services Authority.

In the lead up to the crisis the forbearance shown by the banks was a major contribution to the crisis that we are in. Because the act must take place before a financial institution is considered insolvent, with the Minister having a responsibity here, there could be a political danger that he could be seen to have been involved or charged with causing the crisis. That happened in the Washington Mutual case in Seattle in 2007 where the regulatory authorities intervened, as they should do under the American legislation, to act before the bank became insolvent. This was latterly construed to have precipitated the crisis in the first place. I wonder if the role of the Minister here could lead to a secondary act of forbearance. What is the Minister's opinion on that?