Member

The Government believe that there are likely to be challenges in imposing a new objective when considering the new mechanism as, by its nature, it will reduce the weight placed on the other objectives. A key policy principle behind the new mechanism is that it is not in itself a new resolution strategy; rather, it provides additional optionality to implement existing strategies. In the cases where its use is contemplated, the alternative options could be the use of taxpayer funds or a disruptive insolvency. In that context, the Government continue to believe that the decision to use the new mechanism should be guided by the same objectives and on a consistent basis as all other resolution decisions. If not then the bar to using the mechanism may be implicitly higher than other alternatives. As I have noted before, the Government have set out their clear view that it would be undesirable for any costs in these scenarios to fall on the taxpayer.