Objectives and code
Section 4: Special resolution objectives
28.This section sets out the SRR objectives and requires the FSA, Bank of England and the Treasury to have regard to these objectives in using or considering the use of the stabilisation powers, bank insolvency procedure or bank administration procedure. The SRR objectives are to protect and enhance the stability of the UK’s financial systems, to protect and enhance public confidence in the stability of the UK’s banking systems, to protect depositors, to protect public funds and to avoid interfering with property rights in contravention of the Convention rights (of the Human Rights Act 1998, principal amongst which, in this context, is the right to the peaceful enjoyment of property, under Article 1 of the First Protocol of the European Convention on Human Rights). Subsection (9) makes it explicit that continuity of banking services is included as part of the special resolution objective to protect and enhance the stability of the UK’s financial systems and subsection (10) makes clear that these objectives are not listed in order of priority; rather they are to be balanced in the circumstances of any given case.
Section 5: Code of practice
29.This section requires the Treasury to issue a code of practice about the use of the stabilisation powers, the bank insolvency procedure and the bank administration procedure. It notes the areas that the code may provide guidance on and requires that the FSA, Bank of England and HM Treasury must have regard to the code.
Section 6: Code of practice: procedure
30.This section requires the Treasury to consult with the FSA, the Bank of England and the FSCS before issuing the code and to lay it before Parliament as soon as possible following issue. It also gives Treasury the power to revise the code as appropriate.