Consultation outcome

Enhancing the Special Resolution Regime: Consultation

From:: HM Treasury
Published: 11 January 2024
Last updated: 19 July 2024 — See all updates

Read the full outcome

Enhancing the Special Resolution Regime Government Response to Consultation

Ref: ISBN 978-1-917151-30-6

PDF, 275 KB, 38 pages

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Bank Resolution (Recapitalisation) Bill Cost-Benefit Analysis

Ref: ISBN 978-1-917151-31-3

PDF, 309 KB, 25 pages

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Detail of outcome

Details of the Consultation Response:

In January 2024, the government published a consultation entitled “Enhancing the Special Resolution Regime”. This set out proposals for a new mechanism to facilitate the use of certain existing stabilisation powers to manage the failure of small banks and for certain associated costs to be met by industry rather than the taxpayer. The government is now publishing a document which summarises the feedback received to the consultation and sets out the government’s response to the issues raised.

Details of the Cost-Benefit Analysis:

The government is publishing a document which sets out some cost-benefit analysis on the policy and, in particular, the expected costs to industry of these proposals relative to an insolvency.

Original consultation

Consultation description

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 UK’s robust regulatory regime and ensure there continue to be sufficient protections for financial stability, customers and public funds when banks fail.

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