Banking (No. 2) Bill [HL]

What this bill does

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.Key areasestablishes 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 ownershipcreates a new bank insolvency procedureprovides for a new bank administration procedure for use where there has been a partial transfer of business from a failing bankamends 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 legislationformalises the Bank of England’s role in the oversight of inter-bank payment systemsrepeals legislation governing the issue of banknotes in Scotland and Northern Ireland, limits their issuance to existing issuers and provides for new reserve requirementsmakes 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.