Tag: Lord Myners

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.

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

To ask Her Majesty’s Government what assessment they have made of whether the consolidation of central clearing houses will lead to an increase in risk concentration.

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 whether British banks or the public purse could be compelled to participate in a scheme to rescue a failing bank based in the Eurozone to make a new contribution of equity, accept haircuts on assets or be forced into debt for equity conversions.

Lord O’Neill of Gatley

The Government has ensured that the UK will never be required to pay for any future Eurozone bail outs.

The Bank Recovery and Resolution Directive (BRRD) requires Member States to put in place a bail-in tool, which will allow resolution authorities to write down liabilities in a failing bank and convert their debt instruments into equity. The BRRD represents an important step forward in ensuring that the EU effectively addresses the risks posed by the banking system.

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

To ask Her Majesty’s Government whether the financial regulators have completed their review of the risk algorithms to be used to permit cross-margining by central counterparties to facilitate the takeover of the London Stock Exchange by Deutsche Borse; whether the results of this review will be published, and whether any further steps will be taken to strengthen confidence in central clearing houses.

Lord O’Neill of Gatley

The timings of regulatory reviews of any proposal by a CCP to make significant changes to its margining arrangements would be a matter for the company and regulators acting in accordance with the relevant legislation. The Bank of England’s 2016 Annual Report on the supervision of financial market infrastructures, laid before Parliament on 4 March 2016, provides further information about ongoing regulatory initiatives in relation to CCPs.

The below Parliamentary question was asked by Lord Myners on 2016-10-03.

To ask Her Majesty’s Government whether they will review the impact of quantitative easing on investment and on savings to determine whether it is of greater benefit to one or the other.

Lord Young of Cookham

The independent Monetary Policy Committee (MPC) is responsible for setting monetary policy to deliver its primary objective of maintaining price stability. As the MPC remit makes clear, ensuring price stability is an essential pre-requisite for economic prosperity. The MPC is accountable to both Parliament and the public, through regular reports and evidence given to the Treasury Committee. The Bank of England has previously produced analysis of the distributional effects of asset purchases on different groups in society. At the August Inflation Report hearing on 7 September the Bank committed to updating this analysis.

The below Parliamentary question was asked by Lord Myners on 2015-02-11.

To ask Her Majesty’s Government whether it is routine policy for the Cabinet Office to contact HM Revenue and Customs to consult it prior to the appointment of a non-elected Minister.

Baroness Stowell of Beeston

As was the case under previous administrations, ministerial appointments are a matter for the Prime Minister, in line with the Ministerial Code.

For those individuals upon whom the Prime Minister wishes to confer a life peerage, the independent House of Lords Appointments Commission vets nominations. For those individuals upon whom the Prime Minister wishes to confer a peerage in order that they might sit in the House of Lords to take up a ministerial role, the Commission consults the main regulatory authorities, including HMRC, before giving advice.

The below Parliamentary question was asked by Lord Myners on 2015-02-11.

To ask Her Majesty’s Government whether they still consider it appropriate to allow Chinese banks to open branches in the United Kingdom.

Lord Deighton

The decision-making on applications from Chinese banks to establish branches in the United Kingdom is a matter for the independent Prudential Regulation Authority, consistent with its broader policy on the regulation of non-European Economic Area banks.

The below Parliamentary question was asked by Lord Myners on 2015-02-10.

To ask Her Majesty’s Government which were the 10 jurisdictions into which closed bank accounts held in Switzerland by United Kingdom residents were transferred according to information provided to them by the Swiss National Bank.

Lord Deighton

HL4893

Under the Swiss Agreement HMRC received a list of the top 10 destinations to where funds were moved in the period before the Agreement came into force. They are using this information together with information from compliance work to follow the proceeds of tax evasion.

As with Lichtenstein agreement signed in 2009, HMRC is legally restricted by the Agreement’s terms from publishing the information provided.

HL4896

Where there is evidence of collusion in tax evasion or other wrongdoing, the relevant law enforcement agency would assess that evidence and decide whether to pursue an investigation.

HMRC received the data from the French in April 2010 under very strict international treaty conditions, which limited its use to tax purposes only and prevented HMRC from sharing the data with other law enforcement authorities for investigating other potential offences.

HMRC first asked for the conditions to be relaxed in August 2010. Following a number of more recent representations, the French authorities gave written confirmation on 23 February 2015 that they were lifting restrictions on the use and sharing of the data with other law enforcement agencies and regulators for the purpose of investigating criminal offences.

As a result, HMRC has recently held a multi-agency meeting to discuss how the stolen HSBC Suisse data can be shared with them.

The below Parliamentary question was asked by Lord Myners on 2015-02-10.

To ask Her Majesty’s Government what regulatory actions were taken in the United Kingdom in connection with HSBC as a consequence of the fines imposed in the United States in response to its involvement in money laundering on behalf of Mexican drug cartels.

Lord Deighton

I can confirm to the Noble Lord that the information I provided him in response to his written question answered on 17th June 2013 remains accurate:

US investigations and enforcement action on HSBC focused on their subsidiaries in the US. The Financial Conduct Authority (FCA) has no direct supervisory remit over these HSBC entities.

However, in conjunction with the action taken by the US, the (then) FSA, as lead regulator for the HSBC Group globally, made a number of requirements of HSBC Holdings plc, designed to ensure that all parts of the HSBC Group are compliant with the relevant legal and regulatory requirements across the Group to prevent similar failings occurring in future.

This included requiring a committee of the HSBC Board to oversee matters relating to anti-money laundering, sanctions, terrorist financing and proliferation financing; requiring the Group to revise its policies and procedures to ensure that all parts of the HSBC Group are subject to standards equivalent to those required under UK requirements; HSBC employing an independent monitor to oversee the Group’s compliance with UK anti-money laundering, sanctions, terrorist financing and proliferation financing requirements and to provide independent reporting to the HSBC Board committee and regulators. HSBC Holdings was also required to appoint a Group Money Laundering Reporting Officer (MLRO), with responsibility for ensuring that systems and controls are in place across the Group.

The FCA is closely monitoring the implementation of these requirements by HSBC.