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The Chancellor of the Exchequer has today launched a consultation on the 'special resolution regime' which is designed to reduce the impact of a failing bank. The consultation document is published jointly by HM Treasury, the Financial Services Authority and the Bank of England. The consultation document builds on previous consultation documents published in January and earlier this month outlining the Authorities' proposals for financial stability and depositor protection. Today's technical consultation document sets out further detail on the specifics of the special resolution regime (SRR). It also includes draft clauses for key aspects of the regime, in particular those areas where there has been the most significant interest from stakeholders.
These proposals will now be subject to a further period of consultation, prior to the introduction of legislation later in this Parliamentary session.
Launching the consultation document, Alistair Darling said:
"No system of regulation can or should prevent the failure of each and every firm, but we must do everything possible to reduce the impact of problems which could pose a wider threat to stability.
"The challenge is to ensure that the Authorities can act quickly and decisively to take appropriate steps to resolve failing banks. These proposals for a special resolution regime give the Authorities the full range of powers they need."
Background
1. "Financial stability and depositor protection: special resolution regime" is published jointly by HM Treasury, the Financial Services Authority and the Bank of England (the Authorities). This consultation document (CM7459) is available on the HM Treasury website.
2. This consultation follows two previously published documents: "Financial stability and depositor protection: strengthening the framework" and "Financial stability and depositor protection: further consultation".
3. The deadline for comments on the consultation is 15 September 2008.
4. The Government intends to follow consultation by introducing legislation into the Parliament later this Parliamentary session.
