Bank of England Publishes Resolvability Assessment of Major UK Banks 2024

The Bank of England has published the findings from its second assessment of the eight major U.K. banks under the Resolvability Assessment Framework. The assessment finds that the major U.K. banks have continued to make progress in improving their preparations for resolution, including embedding resolution preparations into their everyday business, and in addressing issues outstanding from the first assessment in 2022. The BoE used the second Resolvability Assessment Framework assessment to assess the major U.K. banks' progress against issues outstanding from the first assessment, and for the first time to test how their preparations for resolution work in practice. The assessment focused on one of the three outcomes major U.K. banks need to achieve to be considered resolvable: having adequate financial resources in the context of resolution. In doing so, the BoE has identified new issues, although it notes that none of these new issues are likely to impede its ability to execute a resolution. Banks are expected, as a priority, to address the feedback from this and the previous Resolvability Assessment Framework assessment and continuously maintain and improve their resolvability capabilities.

In the next Resolvability Assessment Framework assessment, the BoE will focus on the continuity and restructuring outcome, including an assessment of the readiness of the major U.K. banks to quickly plan for and execute restructuring options to address the causes of failure and restore viability. Considering the progress made to date on resolvability and to give the BoE and the major U.K. banks time to further enhance and progress testing of their resolution capabilities ahead of the next assessment, the Prudential Regulation Authority will consult on the necessary rule changes to postpone the third Resolvability Assessment Framework assessment by one year to 2026-27 rather than 2025-26. The BoE will also engage with the major U.K. banks over the coming months on their workplans and anticipated areas of focus during this period, so that progress on resolvability continues to be maintained.

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