The first set of amendments to Clause One scrutinise the Bank of England Act 1998, the creation of a new post of deputy governor at the bank and the role of a supervisory board.
Lords will discuss the insertion of a new clause before Clause Two which proposes an 'oversight committee' - a sub-committee of the court of directors of the bank.
Last stage: Second reading
Lord Sassoon (Conservative) opened the debate outlining the government's proposals for financial services regulation. He said: 'A thriving financial services sector is vital to the prosperity of the United Kingdom'.
He then introduced the key themes of the bill including financial crisis management and two new financial regulatory bodies - the Prudential Regulation Authority and Financial Conduct Authority.
In his speech, Lord Turnbull (Crossbench) focused on the legislative process and spoke from his experience in the insurance industry. He scrutinised the function of the Financial Policy Committee: 'A mechanism will be needed to ensure that we get the best combination of the different policy instruments,' he said.
Lord O'Donnell (Crossbench) made his maiden speech during the debate and drew on his experience as a former cabinet secretary and permanent secretary to the Treasury. He spoke of 'macroprudential regulation' and bank control. He said: 'It is fair to say that the financial crisis has inevitably exposed some weaknesses in our current structures, as it has for a very large number of countries around the world.'
About the bill
The bill was introduced in the Lords at first reading on 23 May. Members will now debate general aspects of the bill during the second reading.
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.
What is second reading?
Second reading is the first opportunity for members of the Lords to debate the main principles and purpose of the bill and to flag up concerns and areas where they think changes (amendments) are needed.
Before second reading takes place, a list of speakers for the second reading debate is opened and interested members add their names to it.
The government minister, spokesperson or a member of the Lords responsible for the bill opens the debate.
Any member can speak in the debate so this stage can indicate those members particularly interested in the bill - or a particular aspect of it - and those who are most likely to be involved in amending the bill at later stages.
Second reading debates usually last for a few hours but sometimes stretch over a couple of days.
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 - in which all the amendments are placed in order. Amendments on related subjects are grouped together and a list (groupings of amendments) is published on the day.
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.