HC Deb 12 June 1997 vol 295 c1278
18. Mr. Goggins

To ask the Chancellor of the Exchequer what steps he is taking to improve financial regulation. [16031

Mr. Darling

I explained a few moments ago the Government's policy on the reform of the regulatory system. We are making good progress towards the reforms that we want to achieve.

Mr. Goggins

I thank my right hon. Friend for that reply. Will he agree to keep the House fully informed about future developments on the Securities and Investments Board? Will he also ensure the maximum possible protection for pensioners and savers?

Mr. Darling

I can certainly give the House those assurances. Not only will we keep the House informed through parliamentary questions, but the legislation required to implement our reforms on the Bank of England's role in monetary policy decisions and its supervisory role will be introduced in the near future. I am sure that there will be many hours of debate on the Floor of the House and in Committee to enable hon. Members to contribute their opinions in the normal way.

Mr. Willetts

Will the Chief Secretary confirm that the most difficult questions will be those relating to whether a bank in difficulty will be allowed to fail or whether the risks to the system as a whole mean that it should be assisted? Will he clarify whether such decisions will be for the Chancellor of the Exchequer, the new financial regulator or the Governor of the Bank of England?

Mr. Darling

The position will be made clear in legislation. The hon. Gentleman is right. When there are problems with banks, the public and the banking system need to know where responsibility lies. The Bank of England is the lender of last resort, but with problems of the magnitude of the collapse of Barings bank—I do not think that the hon. Gentleman was at the Treasury at the time, but I may be wrong and he may be well aware of the arrangements—the Chancellor has always been consulted. That happened with Barings and with Johnson Matthey in the 1980s.