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Banks rescue bill set to become law

Anthony Looch,Press Association
Wednesday 11 February 2009 18:32 GMT
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A "ping-pong" between the two Houses of Parliament was avoided today, when peers accepted a Commons change to the Banking Bill, which now goes for Royal Assent.

Ministers were anxious to ensure that the Bill became law before Parliament rose for a "half-term" break tomorrow, as the legislation used to nationalise Northern Rock and Bradford and Bingley runs out on 20 February.

The Bill gives the Bank of England a statutory duty to promote financial stability, and improve protection for depositors.

It enables the Bank to deal with failing banks, and to give them financial assistance. It also provides new powers to deal with such banks by transferring them more speedily to another private-sector purchaser or bring them into temporary public ownership.

The Government suffered its only defeat on the Bill last week when peers voted by 166 to 131 to support a Tory amendment demanding a quarterly report to Parliament on the actual and potential costs of banking bail-outs.

The Commons rejected the Lords amendment but sent back an amended version requiring that such a report be made every six months.

Treasury Minister Lord Myners said the amendment stipulated that recipients of assistance from the National Loans Fund should not be identified.

He added: "This amendment strikes the right balance between the objective of transparency and the need for appropriate protection of confidentiality."

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