Part XV The Financial Services Compensation Scheme

Provisions of the scheme

F1F2214BContribution to costs of special resolution regime

(1)

This section applies if—

(a)

a stabilisation power under Part 1 of the Banking Act 2009 has been exercised in respect of a bank, building society or credit union within the meaning of that Part (“the institution”); and

(b)

the Treasury think that the institution was or was likely to have been, or but for the exercise of the power would have become, unable to satisfy claims against it.

(2)

The Treasury may require the scheme manager to make payments (to the Treasury or any other person) in respect of expenses of a prescribed description incurred (by the Treasury or that person) in connection with the exercise of the power.

(3)

Subsection (2) is subject to section 214C (limit on amount of special resolution regime payments).

(4)

In subsection (2) “expenses” includes interest at a specified rate on the difference, at any time, between—

(a)

the total amount of expenses (including interest) incurred at or before that time; and

(b)

the total amount recovered, or received from the scheme manager, in respect of the institution, at or before that time, by—

(i)

the Treasury; and

(ii)

any other person who has incurred expenses in connection with the exercise of the power that are of a description prescribed under subsection (2).

(5)

Any payment made by the scheme manager under subsection (2) is to be treated for the purposes of this Part as an expense under the compensation scheme.

(6)

In this section and section 214C “specified rate” means a rate specified by the Treasury.

(7)

Different rates may be specified under different provisions or for different periods.

(8)

A rate may be specified by reference to a rate set (from time to time) by any person.