BoE publishes first resolvability assessment of major UK banks

In its first resolvability assessment of 2022, the BoE has found that, if a major UK bank were to fail today, customers would be able to access their accounts and business services as normal.

The BoE found that “eight major UK firms have made a great deal of progress in enhancing their preparations for resolution and embedding these within their organisations”, including:

• holding more loss absorbing capacity;
• being able to monitor liquidity needs and mobilise liquid resources throughout resolution;
• ‘resolution-proofing’ contracts and critical service arrangements to enable continuity through resolution;
• changes to group structure to keep banks open and operating in a resolution;
• the ability to plan at speed for further restructuring changes to return the firm to long- term viability; and
• greater planning for communications in a resolution to ensure public confidence is maintained.

However, the BoE has identified ‘shortcomings’ for three firms and ‘areas for further enhancement’ for six firms. The BoE also recognised that further improvements could be made on funding in resolution and restructuring planning.