The BSA have responded to the HMT consultation which outlines proposals to enhance the special resolution regime, which would allow for failing banks and buildings societies outside of bail in requirements to be recapitalised as an additional resolution option in the event of a failure.

We welcome that action is being taken to broaden the options available to achieve resolution of failing firms, following the failure of Silicon Valley Bank UK. However, we believe that there is more room for proportionality in these proposals, for example to avoid Credit Unions paying for the recapitalisation of failing firms despite the fact that credit unions cannot benefit from this scheme. 

We continue to urge that financial services regulations are designed with the mutual sector in mind, rather than the unfortunate practice where policies continue to be developed for PLC banks and blindly applied to building societies and credit unions despite significant differences in business and funding models, and risk. 

We look forward to continuing to work with HMT and the PRA on all elements of recovery and resolution planning as we look to support financial stability and good prudential frameworks across the financial services sector. 

You can find the full response here.