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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.
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