Part B Merger, Reorganization, and Insolvency of Banks, 11 Bank Rescues and Financial Stability in the United Kingdom

Subject(s):

Bank supervision — Bank of England

This chapter considers recent UK legislation to deal with bank insolvencies and issues of systemic stability. It discusses the collapse of Northern Rock in 2007; the bespoke legislation — the Banking (Special Provisions) Act 2008 — introduced to deal with the nationalization of Northern Rock; the ensuing difficulties encountered by larger institutions; the Banking Act 2009; the terms of the government's asset protection scheme; and the Bank of England's role as ‘lender of last resort’.