On 18 December 2018, the Bank of England (BoE) and the PRA published proposals on a bank resolvability assessment framework package which is designed to ensure that banks are accountable for their own resolvability. It does this by demonstrating how they are prepared for resolution as well as requiring certain banks to publicly disclose their own assessment of their resolvability.

The package has the following components:

• joint BoE and PRA paper – Introduction to the resolvability assessment framework. This paper introduces the resolvability assessment framework (RAF). It sets out: (i) where the BoE and PRA are regarding resolution; (ii) who the RAF is relevant to and how to navigate the consultations (see below); and a summary of the RAF, covering firms’ responsibility, the BoE’s assessment of resolvability and an overview of the RAF cycle;
• BoE consultation on its approach to assessing resolvability. This consultation paper sets out: (i) how the BoE proposes to assess resolvability as part of the RAF, consistent with its statutory obligation to conduct an assessment of resolvability for UK firms and groups; (ii) how the BoE proposes to increase transparency over the resolvability of individual firms by making a public statement on resolvability. This is consistent with the BoE’s commitment to Parliament in April 2017 that major UK firms will be resolvable by 2022; (iii) draft Statement of Policy setting out policy where the BoE is consulting on new requirements for firms; and (iv) a glossary of resolution terms used in the consultation paper. The deadline for comments on the consultation paper is 5 April 2019; and
• PRA Consultation Paper 31/18: Resolution assessment and public disclosure by firms (CP31/18). In CP31/18 the PRA sets out proposed rules for UK banks and building societies with £50 billion or more in retail deposits on an individual or consolidated basis, as at the date of their most recent annual accounts, to assess their preparations for resolution, submit a report of their assessment to the PRA, and publish a summary of their report. The PRA also sets out a draft Supervisory Statement setting out its expectations relevant to those rules. The deadline for comments on CP31/18 is 5 April 2019.

The BoE also proposes to publish a statement regarding its assessment of resolvability of each firm, highlighting any shortcomings where it believes there is more work to do. Firms’ summaries and BoE statements are planned to be published at the same time.