§ Mr. Deakinsasked the Chancellor of the Exchequer, in view of the financial support previously given by the Bank of England to prevent the collapse of the secondary banking system, what safeguards now exist to prevent a recurrence of the conditions which led to that operation.
§ Mr. LawsonThe primary banking sector has long been supervised by the Bank of England on a non-statutory basis724W and following the events of late 1973 and 1974 the Bank has informally extended the range of its supervision to a number of other deposit-taking institutions. The provisions of the Banking Act, which received Royal Assent on 4 April 1979 and commanded the broad support of all parties, will give this supervision a statutory basis and will extend it, with only a few exceptions, to all institutions which take deposits. The Act provides that it is an offence for institutions to take deposits unless they have a licence to do so from the Bank of England or have been recognised as a bank by the Bank of England. A commencement date for the authorisation provisions of the Act will be announced shortly.