GovWire

These proposals seek to enhance the resolution regime, ensuring that the UK continues to have world-class arrangements to manage the failure of financial firms.? Under these proposals, a new mechanism would be introduced to facilitate the use of certain existing stabilisation powers to manage the failure of small banks. This would enable certain associated costs to be met by industry rather than the taxpayer. This consultation seeks feedback on the proposed source of funds and scope of application.

The UK already has an effective resolution regime, as demonstrated by the successful resolution of Silicon Valley Bank UK which delivered good outcomes for financial stability, customers and taxpayers. However, the Government believes this targeted enhancement would give the Bank of England greater flexibility to manage the failure of small banks effectively.?

This enhancement would in turn reinforce the UKs robust regulatory regime and ensure there continue to be sufficient protections for financial stability, customers and public funds when banks fail.