§ 1. Mr. Nigel Beard (Bexleyheath and Crayford) (Lab)
What progress is being made in settling new international arrangements for banking regulation through the Basel II accords. 
§ The Chancellor of the Exchequer (Mr. Gordon Brown)
The Basel committee on banking supervision expects to complete the new Basel accord on regulatory capital requirements by mid-year 2004, with implementation planned for the end of 2006.
§ Mr. Beard
I thank my right hon. Friend for that reply. Given the increasing tendency of banks to transfer their risks to insurance businesses, does he agree that the capital adequacy of insurance companies that trade internationally may need international regulation similar to that provided for the banks by the Basel accord?
§ Mr. Brown
I am grateful to my hon. Friend, who chairs an all-party committee that has been looking at this matter. The Basel accord is a voluntary arrangement that involves the banks. The EU directive that will flow from it will include financial institutions. I gather that a separate directive will cover the insurance industry, but this House would debate all those matters before any directive was agreed.
§ Dr. Vincent Cable (Twickenham) (LD)
Can the Chancellor confirm that one of the objectives of risk-based regulation under the Basel accord is the prevention of dangerous booms and busts in bank lending? Will he therefore explain why, at a national level, no one is taking responsibility for the often reckless debt promotion by the leading banks and credit card companies? Given yesterday's conclusions of the Treasury Committee, does that not suggest that the Government and the regulators are either blind or asleep where the banks are concerned?
§ Mr. Brown
I suspect that the rest of the hon. Gentleman's party are using their credit cards and 1702 injecting spending into the economy at this very moment, so that we can meet our growth target with greater confidence. His question was more about credit cards than the Basel accord, but I can tell him that I welcome the report from the Treasury Committee. It is clear that issues of transparency are involved, and that the various organisations mentioned in the report—the Office of Fair Trading and the Financial Services Authority, among others will want to look at the recommendations. It is in no one's interest that there is either irresponsible lending or irresponsible borrowing. I hope that he welcomed the consumer credit White Paper that was published a few days ago.
§ Mr. John McFall (Dumbarton) (Lab/Co-op)
I assume that my right hon. Friend the Chancellor will be using his credit card prudently over the Christmas period. However, India and China are not included in the Basel II accords, and the USA is rumoured to be unwilling to sign up. Will that not have an effect on the final agreement?
§ Mr. Brown
I am grateful again to the Chairman of the Select Committee. He has completed a report on credit cards and it is receiving the attention that it deserves today. I hope that people named by the Treasury Committee will look at the report's conclusions. I know that my hon. Friend has also taken an interest in the Basel accord, and it is true that it involves the G10. However, in the nature of things, other countries took up the recommendations in the previous Basel accord. As far as America is concerned, all those involved are working to the mid-2004 deadline. Despite the comments two days ago by one of the US regulators, I am assured that the intention is to complete the work as soon as possible. That will lead to implementation not in 2005 but in 2006. At the same time, we will be discussing an EU directive. That would not be voluntary: it would be a statutory guideline for banks and some financial institutions as well.