Part XV The Financial Services Compensation Scheme
Provisions of the scheme
F1214ERecapitalisation payments
(1)
The Bank of England may require the scheme manager to make a recapitalisation payment to the Bank or another person where the Bank has exercised or decided to exercise a stabilisation power under Part 1 of the Banking Act 2009 in respect of a financial institution so as to achieve—
(a)
a sale of the institution to a private sector purchaser (see section 11 of that Act), or
(b)
a transfer of the institution to a bridge bank (see section 12 of that Act).
(2)
A recapitalisation payment is a payment in respect of the Bank’s estimate of—
(a)
the costs likely to be required for the recapitalisation of the financial institution, and
(b)
any other expenses that the Bank or a relevant person has incurred or might incur in connection with the recapitalisation of the institution or the exercise of the stabilisation power.
(3)
Before exercising the power in subsection (1), the Bank must consult the scheme manager.
(4)
A recapitalisation payment made by the scheme manager under subsection (1) is to be treated for the purposes of this Part as an expense under the compensation scheme.
(5)
In subsection (2)(b), “relevant person” means—
(a)
the Treasury,
(b)
a bridge bank, or
(c)
an asset management vehicle.
(6)
In this section, “bridge bank” and “asset management vehicle” have the meanings given by sections 12 and 12ZA, respectively, of the Banking Act 2009.
(7)
In this section and in section 214H, “financial institution” means a bank, building society or investment firm (within the meanings of Part 1 of the Banking Act 2009).