UK: Tripartite authorities publish "financial stability and depositor protection" consultation paper

The Tripartite authorities - the Bank of England, Financial Services Authority and HM Treasury - have today published a consultation paper titled "Financial Stability and Depositor Protection". This consultation paper builds on the Authorities' earlier consultation and the responses thereto. It also outlines the Government's proposals, including:

Providing the Bank of England with a statutory responsibility for contributing to the maintenance of financial stability.

Improving the policy instruments available to the Bank of England in support of financial stability.

Legislating for the creation of a Financial Stability Committee to support the Governor and Bank of England, drawing upon external expertise.

Giving the Court of the Bank of England a formal role in overseeing the Bank of England’s performance on financial stability.

Legislating to facilitate the FSA obtaining and sharing information that the Bank of England and the Treasury require for purposes related to financial stability.

Providing the Bank of England with statutory immunity from liabilities in damages arising from acts or omissions in carrying out its responsibilities in relation to financial stability and other central bank functions.

Legislating to formalise the Bank of England’s role in the oversight of payment systems to ensure the robustness of payment systems which, if a disruption in the operation of the system were to occur, would be likely to lead to systemic and system-wide consequences.

Legislating to introduce a 'special resolution regime', comprising a set of new, and existing, tools to permit the Authorities to take control when a bank is judged to be failing, and all other options have been deemed insufficient.