If there were a Systemic Crisis and a threat to the liquidity of banks, the Bank might be forced to increase the money supply and relax monetary policy which, on general economic grounds, it might not wish to do.

The lifeboat was a great tribute to the effectiveness of the Bank during a Major Systemic Crisis.

In the area of banking supervision, it is crucial that decisions are taken speedily when a Systemic Crisis arises.

For example, Barings could have not only caused a Systemic Crisis but generated substantial losses for ordinary citizens where Barings was a custodian of various funds.

During the Committee stage of the Bill that became the Bank of England Act 1998, I observed that it was crucial for the financial markets and the wider public to see one person in charge and leading the response to a Systemic Crisis.

Long after 2004, we did a number of exercises with the American authorities about what we would do in situations in which individual banks collapsed and about whether there was a Systemic Crisis as a result.

That rather makes the point that it is difficult for any Government to say in advance that they would never step in in relation to a particular bank, especially if there were a Systemic Crisis, as there was in 2008.

We believe that it is vital for us to eliminate that source of moral hazard, and to ensure that it is possible to resolve failing firms without triggering a Systemic Crisis or requiring support from taxpayers.

Secondly, I approve for the reasons that the Government appear to approve of it, which is that we have a very specific, practical and concrete interest in avoiding the kind of Systemic Crisis which could well be generated by a default by the Irish Government on its bond and other financial obligations, or, indeed, a default by the Irish banks, which are currently being guaranteed by the Irish Government.

He is quite wrong to write off the euro in this way, and he is wrong to suppose that we would not have had to face a Systemic Crisis caused by fiscal collapse in Ireland, Portugal and Greece.

Maybe the Germans, and the Dutch, are resisting a European Union-wide resolution and retail deposit insurance system simply because if there were a problem and a run on the banks in one member state because in that particular context depositors no longer had confidence in the credibility of the retail deposit insurance system, and if that confidence depended entirely on the credibility of the national Government, unsupported elsewhere in the EU, there would inevitably be a Systemic Crisis.

Perhaps the noble Lord did not follow my argument, which was that if there were a run on the banks in a member state, left to itself it could engender a Systemic Crisis that would be far more costly to us, because British banks would write off a very large portion of their assets as a result of collapses elsewhere.

In addressing a Systemic Crisis, a trust special administrator should not be compelled to consider only some solutions, but, rather, the best solutions in the interests of patients.