The Bank of England and the U.K. Prudential Regulation Authority proposed that banks demonstrate their preparedness for resolution and certain banks also publicly disclose their own assessment of their resolvability.
The proposals are the final major piece in the U.K.'s resolution regime for banks, a process by which authorities intervene to manage the failure of a bank in an orderly way, which in turn reduces risks to depositors, the financial system and public finances.
The BoE proposed three outcomes which it considers necessary for a successful resolution. These include a bank having adequate financial resources, being able to continue to do business through resolution and restructuring, and being able to coordinate and communicate within the central bank, with authorities and markets for the resolution and restructuring to be orderly.
The PRA required the banks to assess their preparations for resolution, identify any risks to implementation and their plans to address these.
According to the proposals, the banks will be required to submit their assessments to the PRA by September 2020, and the largest banks in the country with at least £50 billion in retail deposits on an individual or consolidated basis will be required to publicly disclose a summary of that assessment by June 2021.