Lords continued to look at Clause 27, which deals with the winding up, administration or insolvency of UK clearing houses.
Lord Sassoon (Conservative) moved Amendments 176A and 176C which make provisions to allow the Bank of England to direct UK clearing houses in order to protect the UK financial system and maintain public confidence.
He said: ‘These amendments will ensure that the Bank of England and the Treasury are put on notice of the application for the winding up of a clearing house and have the opportunity to consider whether to exercise a resolution power in order to minimise the impact of failure on financial stability.’ Both Amendment 176A and Clause 27, as amended, were agreed by the House.
Baroness Hayter of Kentish Town (Labour) moved Amendment 187AB focusing on EU limits on financial compensation for charities affected by the loss of retail banking deposits. The amendment proposed that the government shall inform EU governments of the UK's desire for a review of the system within 30 days of the bill becoming law.
Highlighting the extra risks facing charities because of the nature of their assets she said: ‘Charities are greatly at risk but normally being only the holders of cash rather than other sorts of fixed assets they are unable to protect themselves against losing all their money.’
Treasury spokesperson Lord Newby (Liberal Democrat), responded on behalf of the government. He confirmed that discussions about the deposit protection level, including the level of compensation, were ongoing.
He said: ‘The government will consider whether it is appropriate to review the eligible limit to charities in the context of our overall negotiating priorities on this proposal.’
Baroness Hayter withdrew her amendment saying: ‘It appears clear that he and the government have understood the problem and I thank him for agreeing to look at this again.’
Topics also under discussion included the Financial Services Compensation Scheme and powers to take disciplinary measures against recognised bodies.
Further line by line scrutiny is scheduled for Wednesday 17 October.
Previous stages of the Financial Services Bill
• News: Lords committee stage day six
• News: Lords committee stage day five
• News: Lords committee stage day four
• News: Lords committee stage day three
• News: Lords committee stage day two
• News: Lords committee stage day one
• News: Lords second reading
What is committee stage?
Detailed line by line examination of the separate parts (clauses and schedules) of the bill takes place during committee stage. Any member of the Lords can take part.
It usually starts no later than two weeks after the second reading and can last for one to eight days or more.
The day before committee stage starts, amendments (changes) are published in a marshalled list (amendments on related subjects are grouped together).
During committee stage every clause of the bill has to be agreed to and votes on the amendments can take place. All proposed amendments can be discussed and there is no time limit, or guillotine, on discussion of amendments.
About the Financial Services Bill
The bill was introduced in the Lords at first reading on 23 May.
The bill will amend the Bank of England Act 1998, the Financial Services and Markets Act 2000 and the Banking Act 2009 to make provisions about financial services and markets. It will also exercise certain statutory functions relating to building societies, friendly societies and other mutual societies.
The Financial Services Bill will amend section 785 of the Companies Act 2006, enabling the Director of Savings to provide services to other public bodies.