Generally speaking, we agree that the UK Authorities need to have detailed knowledge and understanding of a deposit-taker’s business to exercise the Special Resolution Regime tools and enable the orderly resolution of a failed firm without relying on taxpayer support. The support provided to UK banks following the financial crisis of 2008 should never need to be repeated. But we think that detailed knowledge is needed for systemically-important firms only.

Much of the content of the consultation and discussion papers is focused on the prospective resolution of large, complex, even global banks. Our members, on the other hand, are almost entirely domestic in scope, and concentrate on the traditional banking activities of deposit taking, lending and (in a few cases) money transmission services. So the businesses of BSA members are much simpler, generally smaller and domestic, therefore nowhere near as complex as high street or universal banks. In our response, therefore, we argue for a better approach to our members, in particular our smaller members, whose business is essentially simple and homogeneous, and which lack the resources of large banks to undertake extensive RRP activity.

The FSA has said that the RRP material is “naturally” proportionate, and we appreciate that FSA has tried to make it so, but that is not how our members experience it. They find it hard to apply material necessarily designed for large, complex and international banks to their own straightforward, domestic businesses.

Click below to read our response in full:

Our response to the FSA consultation on recovery and resolution plans