The UK Banking Act 2009, Pre-Insolvency and Early Intervention: Policy and Practice

Journal of Business Law, No. 1, 2011

Warwick School of Law Research Paper No. 2010/27

32 Pages Posted: 13 Nov 2010

See all articles by Dalvinder Singh

Dalvinder Singh

University of Warwick - School of Law

Date Written: November 11, 2010

Abstract

The Banking Act 2009 has introduced a special regime to deal with failing banks in the UK. A feature of the legislation is the regulator’s power to trigger the regime by determining whether or not a bank is likely to fail. The use of the Act with Dunfermline Building Society has highlighted the importance of some guidance being developed to assist a bank or building society that is faced with such a situation on how best to work out its position with the regulator, and ultimately with the Bank of England and the Treasury. This paper looks at the key features of the Canadian and US models of early intervention, which could be described as discretionary and rules-based approaches, respectively. It evaluates these two models in comparison with the UK model to assess whether any lessons could be learned from them. It asks whether early intervention alone is the panacea that regulatory authorities are looking for to reduce the likelihood of bank failure.

Keywords: UK Banking Act 2009, failing banks, US banking model

JEL Classification: G20, G21, G28, K10, K20

Suggested Citation

Singh, Dalvinder, The UK Banking Act 2009, Pre-Insolvency and Early Intervention: Policy and Practice (November 11, 2010). Journal of Business Law, No. 1, 2011, Warwick School of Law Research Paper No. 2010/27, Available at SSRN: https://ssrn.com/abstract=1707406

Dalvinder Singh (Contact Author)

University of Warwick - School of Law ( email )

Gibbet Hill Road
Coventry CV4 7AL, CV4 7AL
United Kingdom
024 76150675 (Phone)
024 76524104 (Fax)

HOME PAGE: http://www2.warwick.ac.uk/fac/soc/law/staff/academic/dalvinder

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