On 20 March 2013, Andrew Tyrie (Chair of the Parliamentary Commission on Banking Standards) wrote to Andrew Bailey (CEO of the PRA and a deputy governor of the Bank of England), to acknowledge Bailey’s concerns about Solvency II. Bailey had described Solvency II as “’lost in detail and vastly expensive’”, before criticising “the EU process … as ‘shocking’ and the costs of implementation [as] ‘staggering’”, before inviting Parliament to “cast light on the process”. Tyrie’s response was brief and to the point: “The Committee takes your concerns very seriously and plans to examine them further…”
More than eight months have passed since then, and nothing has happened. The Banking Commission / Treasury Committee (which Tyrie also chairs) hasn’t opened an inquiry; it hasn’t arranged a hearing to take oral evidence, and it hasn’t called for written evidence either. It’s not yet clear why, although it is unfortunate: the Bailey / Tyrie correspondence generated a number of conspiracy theories when it was published in April, and the silence and inactivity are feeding them.
I understand that, although the Treasury Committee is sitting on 27 November 2013 to take oral evidence from three witnesses on EU Financial Regulation, Solvency II is unlikely to be discussed. However, it might come up on another occasion.
To be fair, a Solvency II examination can hardly be described as urgent, and the Commission and Committee have been busy with other things. But when so much time and money has been spent by so many firms over such a long period, it seems reasonable to hope that an examination of some kind will eventually occur. We’ll have to wait and see.
My blog on the Bailey / Tyrie letters and some of the conspiracy theories they generated is here. The Treasury Committee’s website is here. The three witnesses giving evidence on 27 November 2013 are: Dr Gerard Lyons, Chief Economic Advisor to the Mayor of London, Jim O’Neill, Visiting Research Fellow at BRUEGEL, Chair of Cities Growth Commission and former Chair of Goldman Sachs Asset Management and Sir Nigel Wicks, Chairman, British Bankers’ Association.