Part 1

Special Resolution Regime

Exercise of powers: general

Specific conditions: private sector purchaser and bridge bank
8
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.