§ Lords amendment: No. 6, in page 12, line 9, leave out
§ (", who shall chair the Board,")525
§ Mrs. Liddell
The amendments further reinforce the independence of the Board of Banking Supervision by giving the chair to one of the non-executive members. We have consulted the Financial Services Authority chairman, Howard Davies, and, through him, the non-executive members of the board. Having done so, and having confirmed that they are content with this change to their rules, I commend the amendments to the House.
§ Mr. Fallon
We, too, welcome the change made to the Bill on Third Reading in another place. Those who believe in transparency clearly consider it a good idea that the chairman of the authority should not also be the chairman of the Board of Banking Supervision, especially when that board may be investigating the performance of the authority, deciding not to investigate the performance of that authority or, as in the Barings case, dealing with the conclusions of that investigation.
That brings us to the bigger question of exactly what the Board of Banking Supervision's new role is going to be. Perhaps the Economic Secretary can tell us briefly whether it is to be advisory or supervisory.
The independence that the Economic Secretary is now accepting for the chairmanship, which we welcome, brings out the issue of practitioner involvement. I must say at once that we are not happy with what the FSA is proposing in its consultative documents, and we expect a considerable improvement when the draft clauses are published later this year.
§ Mrs. Liddell
I reiterate the point made in Committee, which is that we do not propose to retain the Board of Banking Supervision in its current form when we introduce new legislation. That would not be in keeping with the wider regulatory responsibilities of the FSA. The FSA has been consulting on the issue of practitioner input for the longer term. It is not a subject that we would want to discuss at this stage, but there will be plenty of opportunity to do so at the end of the consultation period, when the legislation comes before the House.
§ Lords amendment agreed to.
§ Lords amendment No. 7 agreed to.