HM Treasury

Financial services

Banking Act 2009

The Banking Act received Royal Assent on 12 February 2009. The legislation was introduced into Parliament on 7 October 2008 and was passed on an accelerated timetable, thanks to cross-party support and cooperation.

The Act builds on the tripartite framework to enhance the ability of the Authorities (the Bank of England, the Financial Services Authority and the Treasury) to deal with crises in the banking system, to protect depositors and to maintain financial stability. The centrepiece is a new permanent Special Resolution Regime (SRR), providing the Authorities with a range of tools to deal with banks and building societies that are failing.

The SRR builds on and refines the temporary tools introduced by the Banking (Special Provisions) Act 2008 (BSPA), which was used to bring Northern Rock plc into temporary public ownership in February 2008, and to resolve Bradford & Bingley plc in September 2008 and the UK subsidiaries (Heritable and Kaupthing Singer and Friedlander) of two Icelandic banks in October 2008. The Parts of the Act establishing the SRR were brought into force on 21 February 2009 in time for the expiry of the BSPA.

The Act also contains a range of other measures: to improve the legal framework and increase the efficiency of the Financial Services Compensation Scheme; to enhance the operation of regulatory frameworks for preventing firms from failing; to protect consumers; and to strengthen the Bank of England. It also gives powers to the Treasury to lay regulations for investment bank insolvency.

Banking Bill: Impact Assessment is available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page. 

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