Consultation outcome

Bail-in powers implementation (including draft secondary legislation)

This consultation was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

This consultation has concluded

Download the full outcome

Detail of outcome

This document summaries the responses received for the consultation on the implementation of bail-in powers.

The 3 draft orders consulted on were:

  • the Banking Act (Restriction of Special Bail-in Provision etc) Order
  • the Banking Act (Mandatory Compensation Arrangements Following Bail-in) Regulations
  • the Building Societies (Bail-in) Order

These draft orders and regulations restrict the use of bail-in powers in relation to certain financial contracts, require arrangements to be made for compensation following bail-in, and apply the bail-in tool to building societies. These instruments are being made as part of the UK’s transposition of the Bank Recovery and Resolution Directive. They will come into force on 1 January 2015.

Original consultation

This consultation ran from to

Summary

A consultation on the implementation of the bail-in powers introduced by the Financial Services (Banking Reform) Act 2013

Documents

The Building Societies (Bail-in) Order 2014: draft secondary legislation

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The Banking Act 2009 (Restriction of Special Bail-in Provision, etc.) Order 2014: draft secondary legislation

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The Banking Act 2009 (Mandatory Compensation Arrangements Following Bail-in) Regulations 2014: draft secondary legislation

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Consultation description

This consultation seeks views on three draft Orders required for bail-in implementation. They are:

  • the application of bail-in to building societies
  • the safeguards to protect certain financial arrangements from bail-in powers
  • the mandatory compensation arrangements to ensure no creditor is left in a worse position following bail-in that they would have been in insolvency

The consultation also seeks industry views on three other issues:

  • a proposal to align the creditor hierarchy of banks and building societies through early transposition of the depositor preference provisions on the Bank Recovery and Resolution Directive (BRRD)
  • a proposal to implement changes to the Financial Collateral Arrangements Directive (FCAD) as set out in the BRRD
  • applying the bail-in tool to banking group companies