BOE Wants Deposit Protection Fund to Recapitalize Failing Banks
- Funds would ensure solvency and allow BOE to extend liquidity
- UK aims to speed up customer payouts by lenders in resolution
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The Bank of England is drawing up plans to recapitalize failing banks through the industry’s deposit protection program under reforms designed to address shortcomings exposed by the collapse of Silicon Valley Bank earlier this year.
The proposal, which would overhaul the BOE’s resolution regime, would see funds from the industry-backed Financial Services Compensation Scheme used to strengthen the books of foundering lenders, a person familiar with the deliberations said, asking not to be named discussing internal matters.