C1C3Part 1Special Resolution Regime

Annotations:
Modifications etc. (not altering text)

F4Chapter 3 Special resolution action

Annotations:
Amendments (Textual)
F4

Pt. 1 Ch. 3 formed from ss. 4-83 (1.1.2015) by The Bank Recovery and Resolution Order 2014 (S.I. 2014/3329), arts. 1(2), 7

F2Groups

Annotations:
Amendments (Textual)
F2

S. 82 cross-heading substituted (1.8.2014) by Financial Services Act 2012 (c. 21), ss. 100(5), 122(3) (with Sch. 20); S.I. 2014/1847, art. 2

C281BAF3F1Bail-in option

1

The Bank of England may exercise a stabilisation power in respect of a banking group company in accordance with section 12A(2) if the following conditions are met.

F52

Condition 1 is that either—

a

the PRA is satisfied that Condition 1 of the general conditions is met in respect of a bank in the same group and the Bank of England is satisfied that Conditions 2, 3 and 4 of the general conditions are met in respect of that bank, or

b

the resolution authority of an EU institution in the same group is satisfied that the conditions for resolution set out in Article 32.1 of the recovery and resolution directive are met in relation to that EU institution, or

c

a relevant third-country authority of a third-country institution in the same group is satisfied that any conditions required by the law of the third country to be met before third-country resolution action may be taken are met in relation to that third-country institution.

2A

For the purposes of determining if a requirement of Condition 1 is met, the PRA, Bank of England, EU resolution authority or relevant third-country authority (as the case may be) may ignore any transfer of losses or capital made between members of the group.

3

Condition 2 is that the Bank of England is satisfied that the exercise of the power in respect of the banking group company is necessary, having regard to the F7public interest in the advancement of one or more of the special resolution objectives.

4

Condition 3 is that the banking group company is an undertaking incorporated in, or formed under the law of any part of, the United Kingdom.

5

Before determining whether Condition 2 is met, and if so how to react, the Bank of England must consult—

a

the Treasury,

b

the PRA, and

c

the FCA.

6

In exercising a stabilisation power in reliance on this section the Bank of England must have regard to the need to minimise the effect of the exercise of the power on other undertakings in the same group.

F67

The definitions in section 81B(9) apply for the purposes of this section.