HMT consults on stabilisation powers to manage the failure of small banks

Article summary

As part of considering the lessons learned following the failure of Silicon Valley Bank (SVB) in March 2023, HM Treasury (HMT) is consulting on proposals to enhance the UK’s resolution regime for banking institutions (banks, building societies, and PRA-designated investment firms). Under the 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. The consultation seeks feedback on the proposed source of funds and scope of application. Responses are sought by 7 March 2024.