The Banking Act 2009 (Mandatory Compensation Arrangements Following Bail-in) Regulations 2014

Mandatory provisions: valuation principlesU.K.

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8.—(1) A relevant compensation order must include the following provisions (subject to any necessary modifications).

(2) In making the assessment of the insolvency treatment as required under regulation 6(2), the independent valuer must determine the amount of compensation in accordance with the following principles (in addition to the principle which applies by virtue of section 57(3) of the Act)—

(a)that the relevant banking institution would have entered insolvency immediately before the coming into effect of the initial instrument;

(b)that the initial instrument would not have been made and that no other instrument, or order, under Part 1 of the Act would have been made in relation to or in connection with the relevant banking institution;

(c)that no financial assistance would have been provided by the Bank or the Treasury after the date on which the initial instrument came into effect if that instrument had not been made.