http://www.legislation.gov.uk/ukpga/2009/1/section/81AABanking Act 2009An Act to make provision about banking.texttext/xmlenStatute Law Database2026-02-20Expert Participation2026-01-19 Banking Act 2009s. 4(8A) (8B)Financial Services Act 2012s. 96(3)Sch. 20s. 122(3)Banking Act 2009s. 8(2)(d) and wordFinancial Services Act 2012s. 96(4)(b)Sch. 20s. 122(3)Banking Act 2009s. 3(5)The Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026reg. 19(4)reg. 1(2) Part 1Chapter 3 81AA1Section 6B (mandatory write-down, conversion, etc. of capital instruments and relevant internal liabilities) applies in relation to a banking group company in the cases set out in subsections (2), (4) , (8) and (8A).2Case 1 is where—athe conditions imposed by section 81B or 81ZBA on the exercise of a stabilisation power in accordance with section 11(2), 12(2) or 12ZA(3) are met in respect of the banking group company,bthe Bank of England has decided to exercise the stabilisation power,cif the banking group company—iis a financial institution which is a subsidiary of an institution (within the meaning of Article 4.1A of the capital requirements regulation) (“the parent institution”), butiiis not an entity within subsection (2A),the requirements of subsection (3) are met, anddsection 12AA (mandatory write-down etc in bail-in cases) does not apply in relation to the banking group company by virtue of the exercise of a power under section 81BA (bail-in: banking group company).2AThe entities covered by subsection (2)(c)(ii) are—aan entity of any of the following kinds which is established in the United Kingdom—ia financial holding company;iia mixed financial holding company;iiia mixed-activity holding company;ba UK parent financial holding company or a UK parent mixed financial holding company,and expressions used in this subsection have the same meaning as in the capital requirements regulation.3For the purposes of subsection (2)(c)—athe first requirement is that—ithe appropriate authority is satisfied that Condition 1 in section 7 is met in relation to the banking group company, andiithe Bank of England is satisfied that Conditions 2, 3 and 4 of that section are met in relation to that company;bthe second requirement is that—iwhere the parent institution is a bank, the PRA is satisfied that Condition 1 in section 7 is met, and the Bank of England is satisfied that Conditions 2, 3 and 4 in that section are met in relation to the parent institution,ii... andiiiwhere the parent institution is a third-country institution, subsection (7) applies in relation to the banking group company by reason of that third country institution.4Case 2 is where—athe appropriate authority is satisfied that Condition 1 in section 7 is met in respect of the banking group company,bthe Bank of England is satisfied that—i(ignoring section 6B) Condition 2 in section 7 is met, andiithat Condition will continue to be met unless the action required by section 6B is taken in respect of the banking group company, andcone of subsections (5) ... or (7) apply in relation to the banking group company.5This subsection applies in relation to the banking group company if—athe PRA is satisfied that Condition 1 in section 7 is met in respect of a bank to which section 81D(1)(a) applies, andbthe Bank of England is satisfied that (ignoring section 6B) Condition 2 in section 7 is met in relation to that bank.6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7This subsection applies in relation to the banking group company if the relevant third-country authority has determined that any conditions required by the law of the third country to be met before—aany power for the relevant third country authority to write down or convert capital instruments or relevant internal liabilities provided for under the law of that third country may be exercised, orbthird-country resolution action may be taken,are met in relation to a third-country institution to which section 81D(1)(a) applies.8Case 3 is where—aextraordinary public financial support is required by the banking group company other than in circumstances where subsection (5E) of section 7 applies by virtue of paragraph (c) of that subsection, andbthe Bank of England is satisfied ... that, in order for a bank ... which is a member of the same group as the banking group company to fulfil its own funds requirements, relevant capital instruments or relevant internal liabilities of the banking group company need to be written down or converted into Common Equity Tier 1 instruments (or both).8ACase 4 is where—athe banking group company is (or, but for the exercise of a stabilisation power, would be) a parent undertaking of a bank from which it has purchased (directly or indirectly) relevant capital instruments or relevant internal liabilities,bthe banking group company is not a resolution entity,cthe relevant capital instruments or relevant internal liabilities of the banking group company have been purchased (directly or indirectly) by a resolution entity in the same resolution group as the banking group company,dany of the cases provided for in section 6A applies to the bank referred to in paragraph (a) above, andenone of cases 1 to 3 in this section applies to the banking group company.9For the purposes of determining if the matters set out in subsections (3) to (7) are satisfied, the FCA, PRA, Bank of England ... or relevant third-country authority (as the case may be) may ignore any transfer of losses or capital made between members of the group.10For the purposes of subsections (3)(a) and (b), (4), (5) and (8)—areferences in section 7 to the bank are to be read—iin the case of subsections (3)(a) and (b), (4) and (5), as references to the banking group company, andiiin the case of subsection (8), as references to the banking group company or the parent institution (as the case may be), andbsection 7(5C)(a) is to be ignored in determining whether Condition 1 in that section is met in relation to the banking group company where that company is not a UK authorised person.11For the purposes of subsections (3), (4) and (5), the “appropriate authority” means—ain the case of a banking group company which is a PRA-authorised person, the PRA;bin the case of a banking group company which is a UK authorised person but not a PRA-authorised person, the FCA;cin the case of a banking group company which is not an UK authorised person—i. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .ii. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .iiiif the parent undertaking of the group is not a UK authorised person and there is a PRA-authorised person in the group, the PRA; andivin all other cases, the Bank of England.12Where the PRA is the “appropriate authority” under subsection (11) in relation to a banking group company in the same group as a UK authorised person which is not a PRA-authorised person, the PRA must consult the FCA before making any decision as to whether the conditions referred to in subsection (3)(a), (4)(a) or (5)(a) (the “relevant conditions”) are satisfied.13Where the FCA is the “appropriate authority” under subsection (11) in relation to a banking group company in the same group as a PRA-authorised person, the FCA must consult the PRA before making any decision as to whether the relevant conditions are satisfied.14For the purposes of this section—............“financial institution” has the same meaning as in the capital requirements regulation; “parent undertaking” has the meaning given in Article 4.1(15)(a) of the capital requirements regulation; “PRA-authorised person” has the meaning given in section 2B(5) of the Financial Services and Markets Act 2000;“relevant third-country authority” means an authority in a country or territory other than the United Kingdom which has functions corresponding to those of the Bank of England, the FCA or the PRA, in relation to bank recovery and resolution;“third-country institution” has the meaning given in section 89H(7);“third-country resolution action” has the meaning given in section 89H(7);“UK authorised person” has the same meaning as in section 105(8) of the Financial Services and Markets Act 2000.Pt. 1 restricted (7.1.2010) by Banking Act 2009 (Exclusion of Insurers) Order 2010 (S.I. 2010/35), arts. 1, 2Pt. 1: power to amend conferred (1.3.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), ss. 17(3)(f), 148(5); S.I. 2014/377, art. 2(1)(b), Sch. Pt. 2S. 82 cross-heading substituted (1.8.2014) by Financial Services Act 2012 (c. 21), ss. 100(5), 122(3) (with Sch. 20); S.I. 2014/1847, art. 2S. 81AA inserted (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 89Pt. 1 Ch. 3 formed from ss. 4-83 (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 7Words in s. 81AA(8)(b) omitted (16.12.2016) by virtue of The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 18Words in s. 81AA(1) inserted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 13(a)(i)Words in s. 81AA(1) substituted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 13(a)(ii)Words in s. 81AA(7)(a) inserted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 13(b)Words in s. 81AA(8)(b) inserted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 13(b)S. 81AA(8A) inserted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 13(c)Words in s. 81AA(14) inserted (28.12.2020) by The Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020 (S.I. 2020/1350), regs. 1(2), 13(d)Words in s. 81AA(2)(c)(i) substituted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 29(2)(a); 2020 c. 1, Sch. 5 para. 1(1)Words in s. 81AA(2)(c)(ii) substituted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 29(2)(b); 2020 c. 1, Sch. 5 para. 1(1)S. 81AA(2A) inserted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 29(3); 2020 c. 1, Sch. 5 para. 1(1)S. 81AA(3)(b)(ii) omitted (31.12.2020) by virtue of The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 29(4); 2020 c. 1, Sch. 5 para. 1(1)Word in s. 81AA(4)(c) omitted (31.12.2020) by virtue of The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 29(5); 2020 c. 1, Sch. 5 para. 1(1)S. 81AA(6) omitted (31.12.2020) by virtue of The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 29(6); 2020 c. 1, Sch. 5 para. 1(1)Words in s. 81AA(8)(b) omitted (31.12.2020) by virtue of The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 29(7); 2020 c. 1, Sch. 5 para. 1(1)Words in s. 81AA(9) omitted (31.12.2020) by virtue of The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 29(8); 2020 c. 1, Sch. 5 para. 1(1)S. 81AA(11)(c)(i)(ii) omitted (31.12.2020) by virtue of The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 29(9)(a); 2020 c. 1, Sch. 5 para. 1(1)Words in s. 81AA(11)(c)(iii) substituted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 29(9)(b); 2020 c. 1, Sch. 5 para. 1(1)Words in s. 81AA(14) omitted (31.12.2020) by virtue of The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 29(10)(a); 2020 c. 1, Sch. 5 para. 1(1)Words in s. 81AA(14) substituted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 29(10)(b); 2020 c. 1, Sch. 5 para. 1(1)Words in s. 81AA(14) substituted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 29(10)(c); 2020 c. 1, Sch. 5 para. 1(1)