Bank Resolution (Recapitalisation) Bill 2024-25

Following the King's Speech, the Bank Resolution (Recapitalisation) Bill 2025-25 has been introduced to Parliament. The Bill intends to avoid additional upfront financial costs for the financial services sector, by relying on the existing Financial Services Compensation Scheme funding system where industry is only levied to pay for the costs of failure after the event. Specifically, it: (i) expands the statutory functions of the FSCS, requiring it to provide funds to the Bank of England upon request which could be used to meet certain costs arising from the use of the resolution regime to manage the failure of a bank, building society or PRA-authorized investment firm; (ii) allows for the FSCS to use its levy-raising powers to recover any funds provided to the BoE after a failure event through imposing levies on the banking sector; (iii) extends the BoE's ability, through explicit provision, to require the issuance of shares in connection with a resolution, to facilitate the BoE's use of the funds provided by the FSCS to meet a failing bank's recapitalization costs; and (iv) makes a number of minor and consequential amendments to legislation to support the measures outlined above and ensure FSCS funds can be used effectively in a resolution.

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