PART 4

Collaboration between Treasury and Bank of England, FCA or PRA

Treasury power of direction
61
1
Subsection (2) applies where—
a
the power of direction is exercisable by virtue of section 60(2) by reference to a public funds notification and the Treasury are satisfied that Condition A is met, or
b
the power of direction is exercisable by virtue of section 60(3) by reference to the provision of qualifying financial assistance and the Treasury are satisfied that Condition A or Condition B is met.
2
The Treasury may give a direction to the Bank of England relating to one or more of the following—
a
the provision by the Bank to one or more financial institutions of financial assistance other than ordinary market assistance offered by the Bank on its usual terms,
b
the exercise by the Bank of any of the stabilisation powers, as defined by section 1(4) of the Banking Act 2009, or
c
the exercise by the Bank of its powers under Part 3 of that Act (bank administration).
3
Condition A is that the giving of the direction is necessary to resolve or reduce a serious threat to the stability of the financial system of the United Kingdom which is connected—
a
in case within subsection (1)(a), with the matters to which the public funds notification relates;
b
in a case within subsection (1)(b), with the matters that gave rise to the provision of the qualifying financial assistance.
4
Condition B is that—
a
the qualifying financial assistance was provided for the purpose of resolving or reducing a serious threat to the stability of the financial system of the United Kingdom, and
b
the giving of the direction is necessary to protect the public interest in connection with the provision of that assistance.
5
References to the provision of qualifying financial assistance are to be read in accordance with section 60(5).
6
This section is subject to section 62.
7
Nothing in this section limits the powers conferred by section 4(1) of the Bank of England Act 1946 (Treasury directions to the Bank).