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<p>The failure of Silicon Valley Bank UK in 2023 prompted His Majesty’s Treasury to launch a consultation concerning the revision of the UK special resolution regime. This consultation proposed to introduce a new mechanism through which the UK deposit guarantee scheme—the Financial Services Compensation Scheme—would financially support the transfer of (mainly) failing small(er) banks to a bridge bank or a private market player. The introduction of this new mechanism appears capable of enhancing the UK regime. Thanks to the amendments to the current legal framework that the Government has laid before the British Parliament, the Bank of England will benefit from more flexibility that, in principle, will make it easier for the UK resolution authority to resolve failing small(er) banks by relying upon strategies which will most likely be more effective also from a system-wide perspective.</p>

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Bank Crisis Management in the UK: Lessons Learnt from the Failure of Silicon Valley Bank and the Government’s Proposal to Enhance the Special Resolution Regime

  • 期刊论文

  • 发表日期：

    2025年1月23日

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  • Marco Bodellini

摘要

The failure of Silicon Valley Bank UK in 2023 prompted His Majesty’s Treasury to launch a consultation concerning the revision of the UK special resolution regime. This consultation proposed to introduce a new mechanism through which the UK deposit guarantee scheme—the Financial Services Compensation Scheme—would financially support the transfer of (mainly) failing small(er) banks to a bridge bank or a private market player. The introduction of this new mechanism appears capable of enhancing the UK regime. Thanks to the amendments to the current legal framework that the Government has laid before the British Parliament, the Bank of England will benefit from more flexibility that, in principle, will make it easier for the UK resolution authority to resolve failing small(er) banks by relying upon strategies which will most likely be more effective also from a system-wide perspective.