New Rules For Britain's Top Banks From The BoE
Since a financial crisis that forced taxpayers to bail out lenders, banks have had to comply with rules that make it easier for regulators to wind them up in an orderly way, such as by keeping critical functions like payments going and transferring accounts to another lender.
The Bank of England stated, that Britain's top banks will have to show investors how they can be shut without causing mayhem in markets. The BoE will force banks to publish plans showing how they would wind up operations if they go bust, a top official announced today, in the next step in regulators’ efforts to clamp down on “too big to fail” lenders.
The UK’s systemically important banks, such as Royal Bank of Scotland, Lloyds, and Barclays, will have to submit a “self-assessment of their resolvability” to regulators, with the BoE intending to publish “elements” of the plans.
It is anticipated that firms would submit the first round of self-assessments from 2020. This would give banks enough time to reflect Britain's departure from the European Union next year, and a requirements from the start of 2019 to "ring fence" their retail arms with extra capital.