Tag: Lord Myners

The below Parliamentary question was asked by Lord Myners on 2016-06-07.

To ask Her Majesty’s Government, further to the answer by Baroness Neville-Rolfe on 6 June (HL Deb, col 627), whether they have the necessary power to pursue pension contribution payments from companies where the parent company is based in the Cayman Islands, the British Virgin Islands, or Monaco.

Baroness Altmann

Each case will need to be considered on its own merits but the Pensions Regulator can use its anti-avoidance powers against targets that are based abroad. Section 303 of the Pensions Act 2004, governing the service of documents abroad, is intended to operate outside the UK jurisdiction The power to enforce any regulatory action against a non-UK company is likely to require the approval or cooperation of the relevant overseas authorities. By and large, these provisions should be enforceable in other EU and Commonwealth jurisdictions.

The Pensions Regulator has demonstrated that it is prepared to use its anti-avoidance powers against targets that are based abroad, as was shown in its handling of the cases involving Sea Containers and the Lehman Brothers group and a complex investigation into the Carrington Wire Defined Benefit Pension Scheme resulted in a £8.5m settlement with two Russian companies.

The below Parliamentary question was asked by Lord Myners on 2016-07-20.

To ask Her Majesty’s Government what assessment they have made of the proposed EU-wide recovery and resolution frameworks for failed central counterparties, and whether in their assessment there are any outstanding issues.

Lord O’Neill of Gatley

The government welcomes the European Commission’s commitment to publish a legislative proposal on a recovery and resolution framework for central counterparties (CCPs) and will assess the proposals once published. Given the global nature of CCPs, the recovery and resolution framework will need to take into account ongoing work by the Financial Stability Board, the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO).

The below Parliamentary question was asked by Lord Myners on 2016-03-21.

To ask Her Majesty’s Government whether they plan to increase or reduce total taxation as a percentage of GDP over the remainder of this Parliament.

Lord O’Neill of Gatley

The Office for Budget Responsibility (OBR) forecast that public sector current receipts (PSCR) will be 36.3% of GDP in 2015-16. As a share of GDP, PSCR is forecast to increase over the remainder of the Parliament. The OBR forecast PSCR to be 36.9% of GDP in 2016-17 and 2017-18, 37% of GDP in 2018-19, and reaching 37.5% of GDP in the final year of this Parliament. However, the Budget represents a net tax cut, worth £3bn over the scorecard period (2016-17 to 2020-21). The Budget backs business with a major overhaul of corporation tax reliefs, a lower corporation tax rate and a big reduction in small business rates.

The below Parliamentary question was asked by Lord Myners on 2016-04-12.

To ask Her Majesty’s Government what assessment they have made of whether, in the event of the takeover of the London Stock Exchange by Deutsche Börse, LCH and Eurex will have a regulator in common, and if so, whether that regulator will be the Financial Conduct Authority.

Lord O’Neill of Gatley

I refer the noble Lord to the investor relations section of the London Stock Exchange Group website, which contains information about the proposed merger, including some information on the combined group’s proposed structure. I also refer the noble Lord to my previous written answer HL7153.

Once formally notified of the proposed merger, the Bank of England and the Financial Conduct Authority (as supervisors of the London Stock Exchange Group’s UK-authorised subsidiaries) must assess the proposal from a regulatory standpoint.

In addition the proposed merger must be approved by competition authorities and is subject to a range of other assessments including those of overseas regulators and shareholders.

European Regulation No 648/2012 (EMIR) sets out detailed standards on the quality of collateral that a central counterparty (CCP) can accept, and includes a general requirement that the CCP can demonstrate to its supervisor that the form of collateral in question does not present unmanageable risk to the CCP. Furthermore, CCPs are permitted under EMIR to invest their collateral “only in cash or in highly liquid financial instruments with minimal market and credit risk.”

Any proposals for inter-CCP links would need to be assessed against relevant parts of EMIR by the Bank of England, as supervisor of LCH. EMIR requires that models used to set CCP margin requirements (and any changes to them) are validated by the CCP’s supervisor. EMIR also requires that a CCP wishing to extend its business to additional products or services must obtain the authorisation of its supervisor.

The below Parliamentary question was asked by Lord Myners on 2016-04-21.

To ask Her Majesty’s Government what plans they have, if any, to review the competition implications for central counterparty clearing of the proposed takeover of the London Stock Exchange by Deutsche Bourse.

Lord O’Neill of Gatley

I refer the noble Lord to my written answer of 26 April (HL7583, HL7584, HL7585, and HL7586).

The below Parliamentary question was asked by Lord Myners on 2016-05-10.

To ask Her Majesty’s Government what assessment they have made of the growth in private sector credit; the use of lending strategies by banks; payday lenders and peer-to-peer lenders; and risks to family finances and financial stability.

Lord O’Neill of Gatley

Private credit growth grew at 3.7% in the year to March, below the 2003-08 average of 11.5%. Industry sources such as Nesta estimate that peer-to-peer lending for consumers and business facilitated £2.4 billion of gross lending in 2015, 85% higher than in 2014. The volume of payday lending fell 35% in the first six months after the government transferred regulatory responsibility of the consumer credit market to the Financial Conduct Authority in April 2014.

The government created the independent Financial Policy Committee (FPC) to ensure we don’t repeat the mistakes of the past, and they have judged that financial stability risks from domestic credit growth are not elevated. The FPC has already taken action on loan-to-income ratios and mortgage affordability to ensure against risks from indebted households, and interest payments as a proportion of household income have fallen to a record low of 4.7% in Q4 2015, compared to 10.6% in Q1 2008.

The below Parliamentary question was asked by Lord Myners on 2016-06-06.

To ask Her Majesty’s Government whether they will consider linking the interest rate on student loans to the Consumer Price Index rather than the Retail Price Index.

Baroness Neville-Rolfe

The Government has no plans to link the interest rate on student loans to the Consumer Prices Index, rather than the Retail Prices Index. The Retail Prices Index has been used as the basis for calculating the interest rates applied to income-contingent student loans since they were introduced in 1998.

The below Parliamentary question was asked by Lord Myners on 2016-07-20.

To ask Her Majesty’s Government what assessment they have made of the consequences for financial stability of combining four large central counterparties (CCPs), LCH.Clearnet Ltd, LCH.Clearnet SA, Eurex and CC&G, when the London Stock Exchange and Deutsche Borse merge; whether adequate recovery and resolution frameworks will be in place for each of these CCPs; and whether those frameworks will be ring-fenced from each other.

Lord O’Neill of Gatley

LCH.Clearnet Ltd, LCH.Clearnet SA, Eurex Clearing and CC&G are separate CCPs regulated under European Regulation No 648/2012 (EMIR) by their respective regulators. The London Stock Exchange Group and Deutsche Borse have publicly stated their intention that “[t]he existing regulatory framework of all regulated entities within the Combined Group would remain unchanged” following the merger. Once notified by the companies of their proposal to merge, the Bank of England will assess the proposal for a change in control of LCH.Clearnet Ltd in line with the criteria set out in EMIR.

The below Parliamentary question was asked by Lord Myners on 2016-03-21.

To ask Her Majesty’s Government what assessment they have made of (1) the impact on economic and financial stability of increasing private sector debt as a percentage of GDP and aggregate personal income, and (2) the level at which those ratios would be judged to be too high.

Lord O’Neill of Gatley

The Government does not have an explicit target for the level of private sector debt. However, we established the independent Financial Policy Committee (FPC), within the Bank of England, which is empowered to identify, assess, monitor and take action in relation to risks across the UK financial system. This includes risks from private sector debt. The FPC actively monitors developments in the aggregate level of credit extended to UK households and private non-financial corporations, and has the macroprudential policy tools required to address any risk it identifies.

The below Parliamentary question was asked by Lord Myners on 2016-04-12.

To ask Her Majesty’s Government what assessment they have made of whether the proposed takeover of the London Stock Exchange by Deutsche Börse gives rise to issues of national importance.

Lord O’Neill of Gatley

I refer the noble Lord to the investor relations section of the London Stock Exchange Group website, which contains information about the proposed merger, including some information on the combined group’s proposed structure. I also refer the noble Lord to my previous written answer HL7153.

Once formally notified of the proposed merger, the Bank of England and the Financial Conduct Authority (as supervisors of the London Stock Exchange Group’s UK-authorised subsidiaries) must assess the proposal from a regulatory standpoint.

In addition the proposed merger must be approved by competition authorities and is subject to a range of other assessments including those of overseas regulators and shareholders.

European Regulation No 648/2012 (EMIR) sets out detailed standards on the quality of collateral that a central counterparty (CCP) can accept, and includes a general requirement that the CCP can demonstrate to its supervisor that the form of collateral in question does not present unmanageable risk to the CCP. Furthermore, CCPs are permitted under EMIR to invest their collateral “only in cash or in highly liquid financial instruments with minimal market and credit risk.”

Any proposals for inter-CCP links would need to be assessed against relevant parts of EMIR by the Bank of England, as supervisor of LCH. EMIR requires that models used to set CCP margin requirements (and any changes to them) are validated by the CCP’s supervisor. EMIR also requires that a CCP wishing to extend its business to additional products or services must obtain the authorisation of its supervisor.