Summary
The Bill establishes for the first time a permanent statutory regime for dealing with failing banks, amends related current legislation and makes new provisions for the governance of the Bank of England.Key areas
- establishes a permanent special resolution regime, providing the authorities with tools to deal with banks that get into financial difficulties. The regime has three options - transfer to a private sector purchaser, transfer to a bridge bank and transfer to temporary public sector ownership
- creates a new bank insolvency procedure
- provides for a new bank administration procedure for use where there has been a partial transfer of business from a failing bank
- amends the Financial Services and Markets Act 2000 to enable changes to the Financial Services Compensation Scheme to be made, which fall outside the scope of the existing legislation
- formalises the Bank of England’s role in the oversight of inter-bank payment systems
- repeals legislation governing the issue of banknotes in Scotland and Northern Ireland, limits their issuance to existing issuers and provides for new reserve requirements
- makes provisions relating to the governance of the Bank of England, including a new statutory financial stability objective and the establishment of a Financial Stability Committee.
Sponsoring departments
Mr Alistair Darling
Labour, Edinburgh South West
Lord Davies of Oldham
Labour, Life peer
Current version of the Bill
Bill passage
Key