- Latest available (Revised)
- Point in Time (29/04/2021)
- Original (As enacted)
Point in time view as at 29/04/2021.
Banking Act 2009, Section 7 is up to date with all changes known to be in force on or before 15 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
Changes and effects yet to be applied by the editorial team are only applicable when viewing the latest version or prospective version of legislation. They are therefore not accessible when viewing legislation as at a specific point in time. To view the ‘Changes to Legislation’ information for this provision return to the latest version view using the options provided in the ‘What Version’ box above.
[F1(1)A stabilisation power may be exercised in respect of a bank only if—
(a)the PRA is satisfied that Condition 1 is met, and
(b)the Bank of England is satisfied that Conditions 2, 3 and 4 are met.
(2)Condition 1 is that the bank is failing or likely to fail.
(3)Condition 2 is that, having regard to timing and other relevant circumstances, it is not reasonably likely that (ignoring the stabilisation powers) action will be taken by or in respect of the bank that will result in Condition 1 ceasing to be met.
(4)Condition 3 is that the exercise of the power is necessary having regard to the public interest in the advancement of one or more of the special resolution objectives.
(5)Condition 4 is that one or more of the special resolution objectives would not be met to the same extent by the winding up of the bank (whether under Part 2 or otherwise).
(5A)The PRA must treat Condition 1 as met if satisfied that it would be met but for financial assistance provided by—
(a)the Treasury, or
(b)the Bank of England,
disregarding ordinary market assistance offered by the Bank on its usual terms.
(5B)The Bank of England must treat Condition 2 as met if satisfied that it would be met but for financial assistance of the kind mentioned in subsection (5A).
(5C)For the purposes of Condition 1, a bank is failing or likely to fail if—
(a)it is failing, or is likely to fail, to satisfy the threshold conditions in circumstances where that failure would justify the variation or cancellation by the PRA under section 55J of the Financial Services and Markets Act 2000 of the bank’s permission under Part 4A of that Act to carry on one or more regulated activities,
(b)the value of the assets of the bank determined [F2is less than the amount of its liabilities,]
(c)the bank is unable to pay its debts or other liabilities as they fall due,
(d)[F3paragraph (b) or (c) (or both)] will, in the near future, apply to the bank, or
(e)extraordinary public financial support is required in respect of the bank and subsection (5E) does not apply to that support.
(5D)“The threshold conditions” means the threshold conditions, as defined by subsection (1) of section 55B of the Financial Services and Markets Act 2000, for which the PRA is treated as responsible under subsection (2) of that section.
(5E)This subsection applies where, in order to remedy a serious disturbance in the economy of the United Kingdom and preserve financial stability, the extraordinary public financial support takes any of the following forms—
(a)a State guarantee to back liquidity facilities provided by [F4the Bank of England],
(b)a State guarantee of newly issued liabilities,
(c)an injection of own funds, or purchase of capital instruments, at prices and on terms that do not confer an advantage upon the bank, where none of the circumstances referred to in subsection (5C)(a), (b), (c) or (d) are present at the time the public support is granted and none of Cases 1 to 4 in section 6A apply.
(5F)Before determining that Condition 1 is met, the PRA must consult the Bank of England.
(5G)Before determining whether or not Condition 2 is met, the Bank of England must consult—
(a)the PRA,
(b)the FCA, and
(c)the Treasury.
(5H)Before determining that Conditions 3 and 4 are met, the Bank must consult—
(a)the PRA,
(b)the FCA, and
(c)the Treasury.]
(6)The special resolution objectives are not relevant to Conditions 1 and 2.
(7)The conditions for applying for and making a bank insolvency order are set out in sections 96 and 97.
(8)The conditions for applying for and making a bank administration order are set out in sections 143 and 144.
Textual Amendments
F1S. 7(1)-(5H) substituted for s. 7(1)-(5) (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 12
F2Words in s. 7(5C)(b) substituted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 7(a)
F3Words in s. 7(5C)(d) substituted (16.12.2016) by The Bank Recovery and Resolution Order 2016 (S.I. 2016/1239), arts. 1(2), 7(b)
F4Words in s. 7(5E)(a) substituted (31.12.2020) by The Bank Recovery and Resolution and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1394), reg. 1(2), Sch. 1 para. 12; 2020 c. 1, Sch. 5 para. 1(1)
Commencement Information
I1S. 7 in force at 21.2.2009 by S.I. 2009/296, art. 3, Sch. para. 1
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Part you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Part you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: