§ Mr. McCrindleasked the Chancellor of the Exchequer what information he has in the light of the Anglo-American pact on banking supervision, about the likelihood of other major banking countries adopting similar requirements with a view to the creation of a system of global banking supervision; and if he will make a statement.
§ Mr. Ian StewartThe United Kingdom-United States supervisory agreement is an important advance towards establishing common international standards of capital adequacy.
The joint announcement by the Bank of England and the United States Federal banking supervision authorities on 8 January invited comment on a proposed common risk asset ratio (a measure of capital strength relative to the size and risk of a bank's business). The proposed measure incorporates off-balance sheet risks. I am placing a copy of the consultative paper in the Library of the House.
The supervisory agreement has drawn on work done in continuing supervisory discussions in Basle and Brussels, and most recently at the international supervisory conference in Amsterdam. The Bank of England and the United States authorities are discussing their proposals with supervisors in other major banking countries, notably in Europe and Japan, as well as with United Kingdom and United States banks. The Government believe that the United Kingdom-United States agreement will encourage further international co-operation in banking supervision. I understand, however, that it is too early to say what the next steps may be.