9 The UK Special Resolution Regime

Subject(s):

Deposit insurance schemes — Deposit protection schemes — Bank of England

When designing a crisis management framework, a key decision for policymakers is whether to combine the deposit protection and bank resolution functions, or whether to create two separate bodies. This chapter sets out the United Kingdom’s approach to dealing with failing banks. In the United Kingdom, the deposit guarantee scheme, the Financial Services Compensation Scheme, is a separate institution from the resolution authority, the Bank of England, and the banks’ prudential supervisor, the Prudential Regulation Authority. The Banking Act 2009 provides for a framework within which the PRA, Bank of England, HM Treasury, and FSCS work closely with each other prior to and during a bank failure.