The UK’s eight largest banks have developed plans that will allow them to fail “safely” without hurting taxpayers or customers, but need to make further improvements to improve the process, the Bank of England said on Friday.
The exercise was the first time regulators have ruled on plans to restructure the UK’s eight largest banks and construction companies, including Barclays, HSBC, Lloyds Banking Group, Nationwide, NatWest, Santander UK, Standard Chartered and Virgin Money UK. .
The plans are the last part of a package of measures to ensure that bank failures are more orderly and less destructive than the global financial crisis of 2007. The resolution element requires banks to be responsible for ensuring that they are structured in such a way that that they can be safely imprisoned if they get into trouble without leaving taxpayers on the hook.
“Saving a large bank safely will always be a complex challenge, so it is important that both we and the big banks continue to prioritize work on this issue,” said Dave Ramsden, Deputy Chief Market and Banking Manager, at the Bank on Friday. of England.
The central bank said it had identified gaps in some of the companies’ plans, as well as “areas for further improvement”.
HSBC said it was asked to take steps to improve the resolvability of its international infrastructure, which covers 64 countries and territories.
“The changes that would be needed to this infrastructure to support certain restructuring actions that may be needed in restructuring would be complex,” the bank said, adding that the work would be carried out over a “multi-year period”.
Barclays said it had “identified some areas for further improvement, including ongoing process optimization and the use of automation where appropriate, which will continue to move forward.”
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