TREASURY COMMITTEE OUTLINES TERMS OF REFERENCE FOR INQUIRY INTO THE BANKING CRISIS AND CALLS FOR EVIDENCE
The Treasury Committee is seeking to identify lessons that can be learned form the banking crisis. To that end, we would welcome written evidence on the following four key areas, from a wide variety of stakeholders.
1. Securing financial stability
1.1 The role of auditors in the banking crisis, and whether any reform to that role is desirable.
1.2 The role, and regulation, of credit ratings agencies in the banking crisis, and whether any reforms are desirable.
1.3 The role, and regulation, of hedge funds in the banking crisis, and whether any reforms are desirable.
1.4 Ongoing reforms to the operation of the Tripartite Committee, and cooperation between the relevant public sector authorities.
1.5 The impact of European Union directives on financial stability, including “passporting”.
1.6 Possible reforms to the remuneration structures prevalent in financial services.
1.7 Reforms to regulatory capital and liquidity requirements.
1.8 Possible improvements to the architecture of international financial regulation and maintenance of global financial stability.
1.9 Regulation of highly complex financial products, and the future of the “originate-to-distribute model”.
1.10 Risks to financial stability emanating from non-bank financial institutions.
1.11 The role of the media in financial stability and whether financial journalists should operate under any form of reporting restrictions during banking crises.
1.12 Monitoring and surveillance of financial stability problems by the public sector.
1.13 The role of the banking system within the overall economy.
1.14 The impact of short-selling in the banking crisis and its regulation.
2. Protecting the taxpayer
2.1 The advantages and disadvantages of the UK Government’s response to the banking crisis, including comparisons with alternative approaches adopted in other jurisdictions.
2.2 The nationalisation of Northern Rock and Bradford & Bingley.
2.3 The Government’s recapitalisation programme, and part-nationalisation of major high-street banks.
2.4 The aims, objectives and exit strategy of the Government’s investments in UK financial institutions.
2.5 The role of UKFI and its relationship with the part-nationalised banks.
2.6 The impact of current Government policy on future taxpayers, including the impact of moral hazard.
3. Protecting consumers
3.1 The role of banks in receipt of public investment in fulfilling the Government’s aspirations for assisting customers, and small businesses, in financial difficulty.
3.2 The importance of retail banking as a “utility”, and whether retail banks should be separate from other activities such as investment banking and insurance provision.
3.3 The competition impact of further consolidation within the retail financial services sector.
3.4 The product pricing of credit facilities, including mortgages, credit cards, store cards and small business loans.
3.5 The protection of UK citizens investing funds in non-UK jurisdictions.
3.6 The impact of deposit protection on both consumers and competition.
3.7 The role of financial advisers in the banking crisis.
3.8 The impact of the banking crisis on consumer confidence in financial institutions.
4. Protecting shareholder interests
4.1 The rights of shareholders in the context of new sources of investment, including the UK Government and sovereign wealth funds.
4.2 The responsibilities of shareholders an ensuring financial institutions are managed in their own interests.
These will be announced in a future press notice. Evidence sessions on this inquiry will resume on Tuesday 13 January.
How to submit your evidence
Contributors should feel no obligation to comment on all the issues raised above, but should focus on those areas in which they have particular expertise or interest. You may wish to confine your evidence to a single area or a single topic within one area. If you have other matters which you think are relevant you may briefly append these.
Please bear in mind that the Committee cannot investigate individual cases. It would be very helpful for us if you could structure your evidence using the headings indicated by the terms of reference.
Evidence previously received as part of the Banking Crisis inquiry (on the role of accounting standards, the nationalised banks, and executive remuneration and incentive structures) is already being considered, and should not be resent.
NOTES ON SUBMISSION OF WRITTEN EVIDENCE
Written evidence should be in Word or rich text format-not PDF format-and sent by e-mail to
[email protected]. The body of the e-mail must include a contact name, telephone number and postal address. The e-mail should also make clear who the submission is from. The deadline is
12 noon on Tuesday 6 January 2009. Submissions should be no longer than 5000 words.
Submissions should be in the format of a self-contained memorandum. Paragraphs should be numbered for ease of reference, and the document must include an executive summary. Further guidance on the submission of evidence can be found at
Submissions should be original work, not previously published or circulated elsewhere. Once submitted, your submission becomes the property of the Committee and no public use should be made of it unless you have first obtained permission from the Clerk of the Committee. Please bear in mind that Committees are not able to investigate individual cases.
The Committee normally, though not always, chooses to publish the written evidence it receives, either by printing the evidence, publishing it on the internet or by making it publicly available through the Parliamentary Archives. If there is any information you believe to be sensitive you should highlight it and explain what harm you believe would result from its disclosure; the Committee will take this into account in deciding whether to publish or further disclose the evidence.
For data protection purposes, it would be helpful if individuals wishing to submit written evidence send their contact details in a covering letter. You should be aware that there may be circumstances in which the House of Commons will be required to communicate information to third parties on request, in order to comply with its obligations under the Freedom of Information Act 2000.