Tag: Richard Burgon

The below Parliamentary question was asked by Richard Burgon on 2016-06-15.

To ask Mr Chancellor of the Exchequer, what correspondence he has had with (a) the Competition and Markets Authority, (b) the Prudential Regulation Authority and (c) new entrant banks about the internal ratings-based approach and the standardised approach for risk weights in capital requirements regulation; and if he will place a copy of that correspondence in the Library.

Harriett Baldwin

The government is committed to increasing banking competition and meets with a wide range of institutions as part of the process of developing policy to help drive more competition.

We have already taken significant action to improve competition in banking. This includes:

• Delivering the Current Account Switch Service and midata so customers are able to compare personal current accounts and switch where they see a better deal – simply, quickly and reliably;

• Lowering barriers to entry and helping to establish the New Bank start-up Unit, making it quicker and easier for new banks to enter the market and compete effectively with the incumbents;

• Creating the Competition and Markets Authority (CMA) as a single, stronger competition regulator, to promote competition and ensure markets work well for consumers, businesses and the wider economy.

The government is also taking action by working with the Prudential Regulation Authority (PRA) and the Bank of England to introduce a more proportionate prudential regime for smaller banks and building societies. The exchange of letters between the Economic Secretary and Andrew Bailey published in November 2015 highlights this work.

In its retail banking market investigation, the CMA provisionally found that banks on the standardised approach are at a competitive disadvantage in the provision of lower LTV mortgages compared to banks using internal models. It also stated that the capital requirements regime has the potential to impact on competition in retail banking in a range of areas. The government, working with the PRA and Bank of England will take forward the issues identified by the CMA.

The below Parliamentary question was asked by Richard Burgon on 2015-12-16.

To ask Mr Chancellor of the Exchequer, which organisations in addition to Rothschilds and the Governor of the Bank of England provided him with advice on whether the Government should sell its stake in the Royal Bank of Scotland.

Harriett Baldwin

The Government has been consistently clear that its policy in respect of Royal Bank of Scotland (RBS) is to return the bank to the private sector in full. The advice received from Rothschilds and the Governor of the Bank of England relates specifically to the appropriate timing of an initial share sale.

UK Financial Investments (UKFI) is responsible for the execution of share sales, and advised the Chancellor in August 2015 that it would be appropriate to conduct the first sale of the Government’s shareholding in RBS. On 3 August 2015, UKFI sold approximately 5.4% of the bank via an accelerated bookbuilding process.

The below Parliamentary question was asked by Richard Burgon on 2016-03-23.

To ask Mr Chancellor of the Exchequer, if he will make it his policy to establish a minimum price below which Government shares in Royal Bank of Scotland will not be sold.

Harriett Baldwin

The first sale of Government shares in RBS was conducted in August 2015 and raised £2.1 billion for the taxpayer. This was an important first step in returning the bank to private ownership, which is the right thing to do for the taxpayer and for British businesses: it will promote financial stability, lead to a more competitive banking sector, and support the interests of the wider economy.

The government will conduct further sales of RBS shares subject to market conditions, and in doing so will maximise value for the taxpayer. The returns on the government’s interventions in RBS will be determined by the success of the whole of the selling programme, rather than the terms achieved on the first few disposals.

The below Parliamentary question was asked by Richard Burgon on 2016-06-15.

To ask Mr Chancellor of the Exchequer, what assessment his Department has made of the systemic financial risk from tranching of securitised assets.

Harriett Baldwin

The Government welcomed the development of international and EU standards to revitalise the regulatory framework for securitisation by encouraging the use of simpler and more transparent products. We agree with the Bank of England that a well-functioning and stable securitisation market will benefit financial stability and the wider economy. We support the Basel standards for securitisation, set with the intention of enhancing financial stability, which see features such as tranching and synthetic structures as being legitimate activity. We also support the need for all securitisations to adhere to appropriate rules on transparency and investor due diligence, and that they must be afforded sensibly calibrated capital requirements. Following the financial crisis it was Basel, working with the Financial Stability Board and the International Organization of Securities Commissions which, set the 5 percent risk retention standard.

In the development and delivery of policy, Treasury Ministers and officials are in regular contact with relevant institutions, regulatory authorities, other governments, industry and other civil society groups including think tanks such as Finance Watch.

The below Parliamentary question was asked by Richard Burgon on 2016-02-19.

To ask Mr Chancellor of the Exchequer, what assessment he has made of the implications for the effectiveness of the ring-fence between retail and investment banking of the Prudential Regulation Authority’s proposal to allow ring-fenced bodies to pay dividends to other entities in the parent group.

Harriett Baldwin

The Prudential Regulation Authority’s (PRA) proposed rules allowing ring-fenced bodies to pay dividends to other entities in the parent group are entirely consistent with the ring-fencing legislation and the Independent Commission on Banking’s recommendations. The PRA has the power to prevent these payments if they deem that they would negatively impact on the viability of the ring-fenced bank.

The below Parliamentary question was asked by Richard Burgon on 2016-03-23.

To ask Mr Chancellor of the Exchequer, what criteria he plans to use to ensure sales of Government shares in Royal Bank of Scotland maximise value for the public purse.

Harriett Baldwin

The first sale of Government shares in RBS was conducted in August 2015 and raised £2.1 billion for the taxpayer. This was an important first step in returning the bank to private ownership, which is the right thing to do for the taxpayer and for British businesses: it will promote financial stability, lead to a more competitive banking sector, and support the interests of the wider economy.

The government will conduct further sales of RBS shares subject to market conditions, and in doing so will maximise value for the taxpayer. The returns on the government’s interventions in RBS will be determined by the success of the whole of the selling programme, rather than the terms achieved on the first few disposals.

The below Parliamentary question was asked by Richard Burgon on 2016-06-15.

To ask Mr Chancellor of the Exchequer, what assessment his Department has made of the (a) benefits to the economy and (b) systemic financial risks from synthetic securitisation.

Harriett Baldwin

The Government welcomed the development of international and EU standards to revitalise the regulatory framework for securitisation by encouraging the use of simpler and more transparent products. We agree with the Bank of England that a well-functioning and stable securitisation market will benefit financial stability and the wider economy. We support the Basel standards for securitisation, set with the intention of enhancing financial stability, which see features such as tranching and synthetic structures as being legitimate activity. We also support the need for all securitisations to adhere to appropriate rules on transparency and investor due diligence, and that they must be afforded sensibly calibrated capital requirements. Following the financial crisis it was Basel, working with the Financial Stability Board and the International Organization of Securities Commissions which, set the 5 percent risk retention standard.

In the development and delivery of policy, Treasury Ministers and officials are in regular contact with relevant institutions, regulatory authorities, other governments, industry and other civil society groups including think tanks such as Finance Watch.

The below Parliamentary question was asked by Richard Burgon on 2016-02-19.

To ask Mr Chancellor of the Exchequer, what meetings (a) Ministers and (b) officials of his Department have had on the implementation of the ring-fence between retail and investment banking since May 2015.

Harriett Baldwin

Since May 2015, in order to ensure the smooth implementation of ring-fencing, ministers and HMT officials have met with regulators, banks, banking organisations, trustees of bank pension funds and HMRC.

The below Parliamentary question was asked by Richard Burgon on 2016-03-23.

To ask Mr Chancellor of the Exchequer, pursuant to the Answer of 29 February 2016 to Question 27454, on banks, what the (a) date of, (b) details of who attended and (c) organisations represented were at each meeting.

Harriett Baldwin

Details of ministerial and permanent secretary meetings with external organisations on departmental business are published on a quarterly basis and are available at:

https://www.gov.uk/government/collections/hmt-ministers-meetings-hospitality-gifts-and-overseas-travel

The below Parliamentary question was asked by Richard Burgon on 2016-06-15.

To ask Mr Chancellor of the Exchequer, what assessment his Department has made of the European Parliament Committee on Economic and Monetary Affairs’ draft report on the proposal for a regulation on securitisation and creating a European framework for simple, transparent and standardised securitisation; and whether he supports the Committee’s proposal to increase risk retention from five per cent to 20 per cent based on a vertical slice of securitised assets.

Harriett Baldwin

The Government welcomed the development of international and EU standards to revitalise the regulatory framework for securitisation by encouraging the use of simpler and more transparent products. We agree with the Bank of England that a well-functioning and stable securitisation market will benefit financial stability and the wider economy. We support the Basel standards for securitisation, set with the intention of enhancing financial stability, which see features such as tranching and synthetic structures as being legitimate activity. We also support the need for all securitisations to adhere to appropriate rules on transparency and investor due diligence, and that they must be afforded sensibly calibrated capital requirements. Following the financial crisis it was Basel, working with the Financial Stability Board and the International Organization of Securities Commissions which, set the 5 percent risk retention standard.

In the development and delivery of policy, Treasury Ministers and officials are in regular contact with relevant institutions, regulatory authorities, other governments, industry and other civil society groups including think tanks such as Finance Watch.