Global financial crisis: the legislative responses

It’s becoming clearer every day that what we’re living through is the biggest financial crisis since the 1930s: Alistair Darling was right in his Isle of Lewis interview with the Guardian a month ago. Of course everyone’s looking to Washington right now, wondering whether Congress will be able to agree a rescue plan. I thought you’d be interested to see the text of the Emergency Economic Stabilization Bill that’s just been rejected.

But some attention is already being directed to what steps Parliament might need to take here. This morning at the Tory conference David Cameron promised to cooperate with the government in getting what he called the Banking Reform Bill passed. I think the draft clauses he means must be those contained in this consultation document, which set out a clear statutory framework for the FSA in effect to authorise the use of, and for the Bank of England to exercise, stabilization powers when a bank is in trouble, including sale to the private sector, transfer to a “bridge” bank set up by the Bank of England, and temporary nationalisation.

I’ve already blogged about the recent measures to outlaw short-selling; for good measure, here’s the Bradford & Bingley PLC Transfer of Securities and Property Order etc. 2008, made under the Banking (Special Provisions) Act 2008, which the government passed in order to nationalise Northern Rock.

Interestingly, the transfer order vests the shares of Bradford & Bingley in the Treasury Solicitor, Paul Jenkins, as nominee for the Treasury. I doubt he expected, when he took on the job a couple of years ago, that he’d end up wiht a bank on his hands.