On 10 June 2022, the Bank of England (BoE) published findings from its first assessment of the resolvability of the eight major UK banks, as part of the resolvability assessment framework (RAF). This is the first assessment by the BoE as resolution authority, of the eight major UK banks’ preparations for resolution under the RAF.
The findings show that, today, a major bank could enter resolution safely: remaining open and continuing to provide vital banking services to the economy. With shareholders and investors, not taxpayers, first in line to bear the costs. The findings also show that, in a resolution, customers would be able to keep accessing their account and business services as normal. Banks’ losses and the costs of recapitalisation would be paid for by shareholders and investors, not tax payers. However, there are outstanding actions that need addressing and UK banks should keep their preparations ready and tested over time, and be confident in their use should the need arise. Going forward, the BoE will repeat its assessment of the major UK banks in 2024, and every two years thereafter to assess the progress they have made in addressing the current findings and enhancing their preparations for resolution.