Bank of Credit and Commerce International (Hansard, 28 November 1991)

§ 3. Mr. Vaz
To ask the Chancellor of the Exchequer if he has had any further discussions concerning the closure of the Bank of Credit and Commerce International; and if he will make a statement.

§ The Economic Secretary to the Treasury (Mr. John Maples)
Both I and my officials have had a number of such discussions with a variety of people. On 6 November I saw a delegation of small business men who had been customers of BCCI, and yesterday I saw representatives of the BCCI depositors protection association.

§ Mr. Vaz
Will the Minister join me in welcoming the proposals put forward by the provisional liquidator and the Sheikh of Abu Dhabi as a first step towards a settlement of the problem? Will he confirm that the Government support a further adjournment of the liquidation period on Monday to allow the negotiations to be completed? Does he agree that the liquidators and other representatives should study every proposal and option in order to secure the best possible deal for depositors, creditors and former members of staff?

§ Mr. Maples
Obviously, the Government share the hon. Gentleman's pleasure at the fact that the liquidator may well be working out an arrangement with the main shareholders that would mean BCCI's creditors possibly getting a considerably greater return on what they are owed than was previously thought possible. Those negotiations are a matter for the liquidator and shareholders, and the question of what the court should do is a matter for the court and the parties before it, not the Government.

§ Mr. Molyneaux
Does the Minister agree that we are long past the stage of apportioning blame? People may have been misled, but they may not have been. Should not we now bend our efforts to supporting the proposal that the Minister mentioned and to finding some way of compensating those who have lost dearly?

§ Mr. Maples
The first line of compensation is the deposit protection scheme, which needs a liquidation order 1053 to come into effect. Whether or not that will happen on 2 December remains to be seen. The Government will welcome any arrangement that the liquidator and the principal shareholders can make that would result in BCCI's depositors getting a considerably greater return on their investment than was previously thought possible.

§ Mr. Boateng
Does the Minister share the view of Sir Leon Brittan and the European Commission that there should be a Europeanwide deposit protection scheme—[HON. MEMBERS: "No."] Such is the hostility of Conservative Members to Europe that it is quite mind-boggling. Does the Minister also share Sir Leon's view that such a scheme should include non-sterling deposits? In the aftermath of the Bingham inquiry, will he ensure that there is a full review of the second banking directive?

§ Mr. Maples
Clearly, the Government will take appropriate action on any recommendations that result from the Bingham inquiry. Early drafts of a possible EC directive on a Europeanwide deposit protection scheme are being discussed. We think that the basis should be home country protection and that one should not be liable to pay deposits in other people's currencies.