Banking Act 2009

The Bill establishes for the first time a permanent statutory regime for dealing with failing banks, amends related current legislation and makes new provisions for the governance of the Bank of England.<br><br><strong>Key areas</strong><br><br><ul><li>establishes a permanent special resolution regime, providing the authorities with tools to deal with banks that get into financial difficulties. The regime has three options - transfer to a private sector purchaser, transfer to a bridge bank and transfer to temporary public sector ownership</li><li>creates a new bank insolvency procedure</li><li>provides for a new bank administration procedure for use where there has been a partial transfer of business from a failing bank</li><li>amends the Financial Services and Markets Act 2000 to enable changes to the Financial Services Compensation Scheme to be made, which fall outside the scope of the existing legislation</li><li>formalises the Bank of England&rsquo;s role in the oversight of inter-bank payment systems</li><li>repeals legislation governing the issue of banknotes in Scotland and Northern Ireland, limits their issuance to existing issuers and provides for new reserve requirements</li><li>makes provisions relating to the governance of the Bank of England, including a new statutory financial stability objective and the establishment of a Financial Stability Committee.</li></ul>