House of Commons · Bill Debate
18 November 2021 · 5 other contributors
Opened by John Glen Con Salisbury
Summarised by AI from the official record, so it can contain mistakes.
John Glen raised concerns about financial services (amendment) bill - clause 1 in the House of Commons. Other MPs contributed to the debate.
Key points
MPs spoke in turn to share their views and ask questions. Here's what each person said.
Opened the debate
The clause aims to ensure legal certainty for contracts relying on LIBOR after its end this year. It inserts new articles into the benchmarks regulation, providing that references to an article 23A benchmark should include synthetic LIBOR where applicable, and ensuring continuity in contractual terms. The Government considers this approach proportionate while not interfering with other valid claims.
The clause ensures that synthetic LIBOR can be used in existing contracts and provides legal certainty by avoiding disputes over synthetic benchmarks. It also allows for orderly wind-down of critical benchmarks like LIBOR, ensuring market integrity and consumer protection.
Questions for the Minister regarding the methodology of calculating synthetic LIBOR, daily variations in the interest rate, impact on derivative markets, legal implications of paragraph 6 of new article 23FA, and fall-back provisions. Concerns over timescale and permanence of the bill.
Questions for the Minister about compensation schemes in case something goes wrong with mortgages, clarity on administrator's immunity from legal action and discretion in calculating synthetic LIBOR.
Addressed questions raised by Pat McFadden and Peter Grant regarding compensation, legal actions, fall-back provisions, future timetable, and rate differences. Stated that judicial review is unlikely due to broad credibility of the methodology.
Expresses gratitude to the Minister for his cooperative spirit and acknowledges the extensive groundwork done before the Bill was presented. Emphasises that despite the Bill not being lengthy, its impact on regulating financial services is significant. Acknowledges the work of various stakeholders including officials, FCA, and industry representatives in contributing to the consultation process.