The Bank (Recovery and Resolution) Law, due to come into force later this year, is designed to make sure that critical functions continue if a bank should fail and to minimise the use of public funds if a financial bail-out is required.
The law has been introduced in response to G20 recommendations following the banking meltdowns that occurred during the 2008/9 financial crisis and is based on the European Union’s Bank Recovery and Resolution Directive and the UK’s Special Resolution Regime.
Although none of the banks with a presence in Jersey failed at the time of the crisis, customers of the Guernsey branch of Icelandic bank Landsbanki lost over 8% of their deposits. The UK government was also forced to bail out RBS – of which over 70% is still in government ownership – and Lloyds Bank.
Full report in The Business in Wednesday’s JEP.
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