Judith Cummins

With this it will be convenient to discuss the following: Amendment 1, in clause 1, page 1, line 20, at end insert— “(2A) The Bank of England must not require the scheme manager to make a recapitalisation payment if it has directed the financial institution to maintain an end-state Minimum Requirement for Own Funds and Eligible Liabilities (MREL) exceeding minimum capital requirements.” This amendment seeks to prohibit the use of FSCS funds to recapitalise large financial institutions, defined as those which have reached end-state MREL. Amendment 3, page 1, line 22, at end insert— “(3A) No application to the scheme manager for recapitalisation payments may be considered by the Bank of England for a financial institution which has been directed to maintain an end-state Minimum Requirement for Own Funds and Eligible Liabilities (MREL) exceeding minimum capital requirements, unless permission has been given, through regulations, by the Chancellor of the Exchequer. (3B) Regulations made by the Chancellor of the Exchequer, subject to subsection (4), shall be made through Statutory Instrument under the negative procedure.” This amendment would ensure financial institutions that maintain an end-state Minimum Requirement for Own Funds and Eligible Liabilities exceeding minimum capital requirements are excluded from the provisions of the Bill, unless permission has been given through regulations. Amendment 4, page 2, line 3, at end insert— “(5A) As a further objective to the special resolution objectives in section 4 of the Banking Act 2009, when discharging its functions in respect of the exercise of recapitalisation payments under this section, the Bank of England must observe the competitiveness and growth objective. (5B) The competitiveness and growth objective is facilitating, subject to aligning with relevant international standards— (a) the international competitiveness of the economy of the United Kingdom, and (b) its growth in the medium to long term.” This amendment would place a further objective on the Bank of England to consider the competitiveness and growth of the market before directing the recapitalisation of failing small banks through a levy on the banking sector. Amendment 2, in clause 5, page 4, line 14, at end insert— “(2B) The code must include guidance to the Bank of England on the exercise of its functions in relation to building societies to ensure that, in circumstances where the use of a recapitalisation power may result in demutualisation, due consideration is given to the impact of such demutualisation on members and on the mutuals sector. (2C) In preparing the guidance required under subsection (2B), the Treasury shall consider the feasibility of selecting a purchaser from the mutuals sector as a means of avoiding demutualisation, provided such a purchaser meets the resolution objectives.” This amendment seeks to ensure that, where possible, the selection of a purchaser from the mutuals sector is considered to avoid demutualisation, provided this aligns with the Bank's resolution objectives.