Banking Act 2009

7 General conditions

(1) A stabilisation power may be exercised in respect of a bank only if the FSA is satisfied that the following conditions are met.

(2) Condition 1 is that the bank is failing, or is likely to fail, to satisfy the threshold conditions (within the meaning of section 41(1) of the Financial Services and Markets Act 2000 (permission to carry on regulated activities)).

(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 enable the bank to satisfy the threshold conditions.

(4) The FSA shall treat Conditions 1 and 2 as met if satisfied that they 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).

(5) Before determining whether or not Condition 2 is met the FSA must consult—

(a) the Bank of England, and

(b) 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.