No one would have anticipated that the closure of a bank would result in riots, disorder, or such anxiety, anguish and public concern as followed the decision that fateful Friday 5 July to close down the Bank of Credit and Commerce International. But this is the stuff of which fictional best sellers are made. We have all heard of the bank that likes to say yes. This is the bank that refuses to die. It is a story straight out of the Arabian Nights—of a bank, a sheikh, a governor, a political crisis and a Prime Minister who claims to have known nothing.

Every day and every hour, there seems to be some development or some new information about BCCI which occupies the top of our political agenda. It has dwarfed all other issues and events. It therefore seems remarkable that the Government refuse to give parliamentary time for a full debate, although we have had two statements, one private notice question and the announcement of a public inquiry as well as debating amendments to the Finance Bill last week. I welcome this debate and I pay tribute to hon. Members on both sides of the House who have helped to form the action committee on BCCI, especially the hon. Member for Nottingham, East (Mr. Knowles).

In the past few days I have had meetings with thousands of depositors and members of staff. They are in a time warp. It is like talking to victims of some terrible disaster. They are worried, perplexed and anxious. Many have lost their life savings, and many will be ruined. The reputations of some business people with even the most tenous connections have been put at risk. For the staff —12,000 of them worldwide—the situation is bleak indeed. They have lost jobs and deposits and they are at risk in the employment market because they have to some extent been ridiculed for working for an organisation that has been so bitterly attacked.

Those who have acted improperly ought to be brought to justice, but there have been no arrests or detentions and no prosecutions. We should like to know when they will start.

What action is being taken to support initiatives to help members of staff to keep their jobs? What arrangements can be made to help members of staff to clear their names? It would be ungracious not to welcome the establishment of the committee of inquiry announced by the Chancellor on Friday, but will the Minister explain why the Governor of the Bank of England told Members at 8 pm on Thursday that he did not favour an inquiry as it was not in the interests of depositors or the liquidator, but by Friday lunchtime had changed his mind? What persuaded him to do that?

Did the Governor meet the Chancellor before the two occasions that I have mentioned? The Prime Minister today announced the chairman of the team of inquiry, Lord Justice Bingham. Will the Minister confirm that the commission of inquiry will have full judicial authority, including the right to subpoena and examine all accounts and transactions of all BCCI banks and related activities throughout the world? The commission should also have full access to all information from Ministries, Depts and regulatory authorities, and the right to decide issues of compensation, the period for compensation, and any appeal procedures.

Will the Minister accept that the commission's main responsibility will be to undertake a thorough examination of all the events leading to the Bank of England's decision to close down the BCCI's operations and to assess whether the Bank of England examined all possible options to contain the situation? Will the commission of inquiry undertake an analysis of the economic and social consequences of BCCI's closure both in the United Kingdom and throughout the world? Will it be able to propose essential reforms, including reforms of the Bank of England and the other authorities? Will it be able clearly to identify the criminal and civil responsibilities of all concerned, including the auditors? Finally, will the commission be able to give us an interim report so that any findings can be the subject of parliamentary debate or legislation?

I pay tribute to the frankness of the Governor of the Bank of England, who I believe will eventually become the unfortunate scapegoat for the whole problem. In the two meetings that he has held with hon. Members, on Wednesday 10 July and on Thursday 18 July, to which he readily agreed and at which he was unfailingly courteous and frank, he gave us details and answered questions about events. However, if there has been a failure to regulate, no matter how nice and courteous the Governor may be, he must take full responsibility. He knew the seriousness of the situation. That is why he went to Downing street on 28 June to give the news of the proposed closure. We are entitled to know whether the bank, as the watchdog, had carried out its duty adequately —not whether it acted too early or too late, but whether it acted properly. The same considerations apply to Ministers.

The Bank of England has certain statutory responsibilities, and while the rest of us can raise rumours and other points of concern, the bank has the power to act. For example, did the Governor know about BCCI's alleged terrorist links? What action was taken after the two Price Waterhouse reports in March and October 1990? We know from our meeting with the deputy Governor on 10 July that 10 special reports were commissioned by the Bank of England, ending with the report of 25 June.

Does the Minister unequivocally endorse the role of the Bank of England? Is there nothing that it did or failed to do which causes the Government concern? The Chancellor said in his statement on Friday: I have no reason to doubt that the Bank acted properly and promptly in the best interests of the depositors."— [Official Report, 19 July, 1991; Vol. 195, c. 716.] Does the Minister agree?

It is also important to know when Ministers and Treasury officials knew, and what action was taken. Last year, in a debate in another place, the noble Lord Henley said: Treasury officials have been in touch with the Bank of England to emphasise to it the degree of public concern about the case, not least that expressed by noble Lords, and to ask it to take full account of the concern in its continued supervision of BCCI. The Bank of England has confirmed that it is doing this and will continue to do so."—[Official Report, House of Lords, 23 April 1990; Vol. 518, c. 421.] What action did the Treasury take to ensure that the situation was being monitored? When the Price Waterhouse report was received in October 1990, the Governor told us that it did not contain any fraud or anything to warrant the action now being taken. Does the Minister agree?

Yesterday in the House, there was an exchange between my right hon. Friend the Leader of the Opposition and the Prime Minister. On Thursday, I chaired two cross-party meetings. At the meeting with the Governor of the Bank of England, the Governor clearly stated when pressed by two colleagues that he always kept the Chancellor of the Exchequer fully informed of all major developments. He said that it was his job to do so, but that he could not divulge the nature of the conversations.

That course of action was confirmed in a written reply to me this evening from the Minister. I asked the Chancellor to list the dates on which we had discussed the trading position or other matters relating to BCCI with the Governor of the Bank of England in the past two years. The Minister replied that the Chancellor had discussed a number of supervisory cases, including BCCI, with the Governors of the Bank of England on a number of occasions since becoming Chancellor, but was not aware until 26 June that fraud had been uncovered.

Clearly the then Chancellor, now the Prime Minister, had similar meetings with the Governor. It is inconceivable that the Prime Minister was not informed of the circumstances of BCCI. BCCI was going through the most important development of the time, which resulted in the resignation of the president and chief executive of the bank, and a major reconstruction of the bank was taking place. At that time of hostilities in the Gulf, the Chancellor would have wanted to have that information and to act on it in defence of the leader of a friendly Gulf state. The Prime Minister must return to the House and make a statement about his true knowledge of events. He cannot keep hiding behind the old lady's skirts.

I accept that the Prime Minister did not know about the fraud until 28 June, but he has been reticent about telling the House what else he knew. The final report from Price Waterhouse arrived on 25 June. By 26 June, the gist of the report had been given to a Treasury official, John Geeve. On 28 June, a special meeting was held at Downing street, which was attended by both the Prime Minister and the Chancellor, and both were informed of what was to be done. There is then an extraordinary seven-day gap, in which there was no political or diplomatic initiative.

It is beyond belief that the Prime Minister, who a few months ago had been fighting on the same side as the sheikh, could not even pick up a telephone or send an official to visit the sheikh to see what could be done to save the bank. That crucial gap, that seven-day silence, has still not been explained. Both the Prime Minister and the Chancellor must have known the consequences, both financial and political, of that gap. They had a duty to act. The shiekh makes it clear that, had he been asked, he would have provided financial support to save the bank, but no approach was made.