Regulatory Alerts2026-04-13
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Bank of England enhances resolution readiness with updated operational guides
The Bank of England has published an operational guide detailing how it executes a 'transfer resolution' for failing financial firms, involving the transfer of shares or business to a private sector purchaser or a bridge bank. This guide outlines the operational processes for such transfers and summarizes the new recapitalisation payment mechanism, introduced by the Bank Resolution (Recapitalisation) Act 2025, which allows banking sector funds to recapitalise firms lacking sufficient loss-absorbing capacity. The mechanism enhances the Bank's flexibility, broadening the scope of firms suitable for transfer and improving the prospects of securing a buyer during a resolution, thereby increasing awareness and understanding of these crisis management actions.
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