trending Market Intelligence /marketintelligence/en/news-insights/trending/_mudoq-andpblqsg-foabw2 content esgSubNav
In This List

Major UK banks to publish resolution plans under new BoE proposal

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


Major UK banks to publish resolution plans under new BoE proposal

The Bank of England plans on requiring major U.K. banks to submit a self-assessment of their resolvability — a plan detailing how they will wind up their business in the event of bankruptcy — as part of regulatory efforts to ensure that failing banks bow out in an orderly manner.

The initiative was announced by Jon Cunliffe, the Bank of England's deputy governor, in a June 5 speech delivered at an annual Futures Industry Association expo in London.

Once the systemically important banks have submitted the plans, the Bank of England may require certain elements of the self-assessments to be made public in order to improve transparency in the process, according to a press release.

The central bank will launch a consultation later in 2018 on the exact framework banks will need to follow with regard to the self-assessment reporting. It expects banks to start submitting first round self-assessments from 2020, which would give the sector time to adjust to the new framework and incorporate changes related to Brexit and ring-fencing.

"For resolution to have maximum efficacy banks not only need to be able to meet the policy standards and have sufficient loss absorbing capacity. They need also to have the capabilities to be ready to implement a resolution," Cunliffe said.

"The public needs to have confidence that we have learned the lessons of the crisis: that we have acted to ensure that we have an alternative to the previous crisis where we had privatization of bank profits in good times and the socialization of bank losses when things go wrong," City A.M. quoted him as saying.