Member

Paragraphs 26 to 32 of the draft updates to the code of practice provide a detailed explanation of how the Bank of England would be required to assess the costs to the Financial Services Compensation Scheme, including the likely costs in an insolvency counterfactual. It is of course right that the Bank of England should not impose any more costs on the wider banking sector than it needs to in order to meet the special resolution objectives when deploying the new mechanism. However, the Banking Act 2009 requires all the resolution objectives to be balanced as appropriate in each case. This amendment could therefore dilute the other special resolution objectives. This comes into sharpest relief concerning public funds, as these may be the primary source of alternative funding in the absence of the new mechanism.