In July 2008, UK authorities published two consultation papers setting out proposals for dealing with failed banks. The consultation closed on September 15 2008. Based on preliminary reactions, the consultation is set to be hard fought.
Northern Rock remains firmly on the minds of politicians. There is a sense that something must be done. But the proposals, as they stand, risk being seen in hindsight as hurried knee-jerk legislation that does far more harm than good: in this case by upsetting legal certainty and creditor rights. Given recent insolvencies and the potential problems with yet more UK banks, the principal legal issues associated with the pre-insolvency tools under the proposed special resolution regime (SRR) are worth discussing in detail.
Enough powers already
The Financial Services Authority (FSA), Bank of England and UK Treasury (together the tripartite authorities) are continuing to consult on changes to the UK bank regulatory regime following the...