Financial Services Act 2012

Section 4

SCHEDULE 1 Bank of England Financial Policy Committee

PART 1 Schedule to be inserted as Schedule 2A to Bank of England Act 1998

This is the Schedule to be inserted in the Bank of England Act 1998 after Schedule 2—

Section 9B

“SCHEDULE 2A Financial Policy Committee

Terms of office of appointed members

1 (1) Appointment under section 9B(1)(d) or (e) as a member of the Financial Policy Committee is to be for a period of 3 years, but this is subject to sub-paragraph (2) and to paragraph 3.

(2) Initially some appointments may be for shorter and different periods so as to secure that appointments expire at different times.

2 (1) A person may not be appointed as a member of the Committee under section 9B(1)(e) more than twice.

(2) For this purpose an appointment which by virtue of paragraph 1(2) is for a period of less than 3 years is to be disregarded.

3 (1) If it appears to the Chancellor of the Exchequer that in the circumstances it is desirable to do so, the Chancellor may, before the end of the term for which a person is appointed as a member of the Committee under section 9B(1)(e), extend the persons's term of office on one occasion for a specified period of not more than 6 months.

(2) The term being extended may be the person's first or second term or, in a case where paragraph 2(2) allows a third term, the person's third term.

(3) If a person whose first term of office is extended is subsequently re-appointed under section 9B(1)(e)—

(a) the length of the second term is to be reduced by a period equal to the extension of the first term, but

(b) the second term may itself subsequently be extended under sub-paragraph (1).

(4) In a case where a person's second term of office is extended and paragraph 2(2) allows a third term, sub-paragraph (3) is to be read as if the references to first and second terms were references to second and third terms respectively.

4 (1) A person appointed under section 9B(1)(d) or (e) may resign the office by written notice to the Bank.

(2) Where the notice relates to a person appointed under section 9B(1)(e), the Bank must give a copy of the notice to the Treasury.

5 The terms and conditions on which a person holds office as a member of the Committee appointed under section 9B(1)(e) are to be such as the Oversight Committee may determine.

Qualification for appointment

6 (1) The following persons are disqualified for appointment under section 9B(1)(d) or (e)—

(a) a Minister of the Crown;

(b) a person serving in a government department in employment in respect of which remuneration is paid out of money provided by Parliament.

(2) A member of the Monetary Policy Committee of the Bank appointed under section 13(2)(c) is disqualified for appointment under section 9B(1)(e).

Removal of appointed members

7 A person appointed under section 9B(1)(d) or (e) vacates office on becoming a person to whom paragraph 6(1)(a) or (b) applies.

8 A person appointed under section 9B(1)(d) vacates office on ceasing to have executive responsibility within the Bank for the analysis of threats to financial stability.

9 (1) The Oversight Committee may, with the consent of the Chancellor of the Exchequer, remove a member appointed under section 9B(1)(d) or (e) (“M”) if it is satisfied—

(a) that M has been absent from 3 or more meetings of the Financial Policy Committee without the Committee's consent,

(b) that M has become bankrupt, that a debt relief order (under Part 7A of the Insolvency Act 1986) has been made in respect of M, that M's estate has been sequestrated or that M has made an arrangement with or granted a trust deed for M's creditors, or

(c) that M is unable or unfit to discharge M's functions as a member.

(2) The Oversight Committee may, with the consent of the Chancellor of the Exchequer, also remove a member appointed under section 9B(1)(e) (“M”) if it is satisfied that in all the circumstances M's financial or other interests are such as substantially to affect the functions as member which it would be proper for M to discharge.

Meetings

10 (1) The Committee shall meet at least 4 times in each calendar year.

(2) The Governor of the Bank (or in the Governor's absence the Bank's Deputy Governor for financial stability) may summon a meeting at any time on giving such notice as the person giving the notice thinks the circumstances require.

Proceedings

11 (1) At a meeting of the Committee, the proceedings are to be regulated as follows.

(2) The quorum is to be 6 (excluding the Treasury's representative) and of the 6—

(a) one must be the Governor of the Bank or the Bank's Deputy Governor for financial stability,

(b) unless both those mentioned in paragraph (a) are present, one must be either of the other Deputy Governors of the Bank, and

(c) one must be a member appointed under section 9B(1)(e).

(3) The chair is to be taken by the Governor of the Bank or, if the Governor is not present, by the Bank's Deputy Governor for financial stability.

(4) The person chairing the meeting must seek to secure that decisions of the Committee are reached by consensus wherever possible.

(5) Where that person forms the opinion that consensus cannot be reached, a decision is to be taken by a vote of all those members present at the meeting.

(6) In the event of a tie, the person chairing the meeting is to have a second casting vote.

(7) At a meeting of the Committee—

(a) the Treasury's representative may not vote, and

(b) any view expressed by the Treasury's representative is to be disregarded in determining under sub-paragraph (4) or (5) whether there is a consensus.

(8) Subject to sub-paragraphs (2) to (7) and paragraph 14, the Committee is to determine its own procedure.

12 The Committee may, in relation to sub-paragraph (2), (3), (4) or (5) of paragraph 11, determine circumstances in which a member who is not present at, but is in communication with, a meeting is to be treated for the purposes of that sub-paragraph as present at it.

13 The Committee may invite other persons to attend, or to attend and speak at, any meeting of the Committee.

14 If a member of the Committee (“M”) has any direct or indirect interest (including any reasonably likely future interest) in any dealing or business which falls to be considered by the Committee—

(a) M must disclose that interest to the Committee when it considers the dealing or business, and

(b) the Committee must decide whether M is to be permitted to participate in any proceedings of the Committee relating to any question arising from its consideration of the dealing or business, and if so to what extent and subject to what conditions (if any).”

PART 2 Other amendments relating to Financial Policy Committee

Bank of England Act 1998 (c. 11)

1 In section 4 of the Bank of England Act 1998 (annual report by Bank), in subsection (2), for the “and” at the end of paragraph (a) substitute—

“(aa) a report by the court of directors on the activities of the Financial Policy Committee of the Bank, and”.

2 In section 15 of the Bank of England Act 1998 (publication of minutes of meetings of Monetary Policy Committee) after subsection (4) insert—

“(4A) The Bank shall exclude from minutes published under this section information which relates to proceedings of the Financial Policy Committee if the Bank considers that publication of that information would be against the public interest.”

3 In section 40 of the Bank of England Act 1998 (orders), after subsection (4) insert—

“(4A) Section 9N contains its own provisions about parliamentary procedure in relation to an order under section 9L.”

House of Commons Disqualification Act 1975 (c. 24)

4 In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975 (other disqualifying offices), at the appropriate place insert—

• “Member of the Financial Policy Committee of the Bank of England appointed under section 9B(1)(d) or (e) of the Bank of England Act 1998.”

Northern Ireland Assembly Disqualification Act 1975 (c. 25)

5 In Part 3 of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (other disqualifying offices), at the appropriate place insert—

• “Member of the Financial Policy Committee of the Bank of England appointed under section 9B(1)(d) or (e) of the Bank of England Act 1998.”