Banking Act 2009

8 Specific conditions: private sector purchaser and bridge bank

(1) The Bank of England may exercise a stabilisation power in respect of a bank in accordance with section 11(2) or 12(2) only if satisfied that Condition A is met.

(2) Condition A is that the exercise of the power is necessary, having regard to the public interest in—

(a) the stability of the financial systems of the United Kingdom,

(b) the maintenance of public confidence in the stability of the banking systems of the United Kingdom, or

(c) the protection of depositors.

(3) Before determining whether Condition A is met, and if so how to react, the Bank of England must consult—

(a) the FSA, and

(b) the Treasury.

(4) Where the Treasury notify the Bank of England that they have provided financial assistance in respect of a bank for the purpose of resolving or reducing a serious threat to the stability of the financial systems of the United Kingdom, the Bank may exercise a stabilisation power in respect of the bank in accordance with section 11(2) or 12(2) only if satisfied that Condition B is met (instead of Condition A).

(5) Condition B is that—

(a) the Treasury have recommended the Bank of England to exercise the stabilisation power on the grounds that it is necessary to protect the public interest, and

(b) in the Bank’s opinion, exercise of the stabilisation power is an appropriate way to provide that protection.

(6) The conditions in this section are in addition to the conditions in section 7.