Specific conditions: asset management vehicle8ZA

1

The Bank of England may exercise a stabilisation power in respect of a bank in accordance with section 12ZA(3) only if satisfied that Conditions A and B are met.

2

Condition A is that the power is exercised in connection with the exercise of one or more stabilisation powers in respect of the bank, or a company which is a banking group company in relation to the bank, otherwise than for the purposes of the third stabilisation option.

3

Condition B is that the Bank of England is satisfied that—

a

the situation of the market for the assets which it is proposed to transfer by the exercise of the stabilisation power is of such a nature that the liquidation of those assets under normal insolvency proceedings could have an adverse effect on one or more financial markets,

b

the transfer is necessary to ensure the proper functioning of the bank or bridge bank from which the transfer is to be made, or

c

the transfer is necessary to maximise the proceeds available for distribution.

4

Before determining whether Conditions A and B are met, and if so how to react, the Bank of England must consult—

a

the PRA,

b

the FCA, and

c

the Treasury.

5

“Normal insolvency proceedings” has the meaning given in Article 2.1(47) of the recovery and resolution directive (and, in particular, includes the bank insolvency procedure and the bank administration procedure).

6

The conditions in this section are in addition to the conditions in sections 7 and 8.