Member

Finally, I appreciate noble Lords’ broader concerns about the costs of the new mechanism for the financial services sector, which has guided some of our debate on these and similar amendments. For this reason, the Government have, through tabling amendments and publishing draft updates to the code of practice, sought to clarify how the Bank of England would consider these costs when assessing the resolution conditions and to enhance transparency and accountability. As a public authority, the Bank of England is under general public law duties to ensure that, for any decision that it makes, it considers whether the impact on a firm or group of firms is proportionate to the outcome sought. Through their other amendments and the changes to the code, the Government will ensure that the Bank of England is subject to ex post scrutiny of its actions via the reports that it will need to make to the Chancellor. Given that the potential impacts on growth of any resolution action—or the absence of it—will take time to materialise, the Government believe that this form of accountability is likely to be more effective.