HM Treasury published a consultation document on the implementation of bail-in pursuant to the Financial Services (Banking Reform) Act 2013. The consultation is open for comment until 7 May, 2013.
The consultation seeks views on three draft Orders required for bail-in implementation. They are:
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the application of bail-in to building societies
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the safeguards to protect certain financial arrangements from bail-in powers
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the mandatory compensation arrangements to ensure no creditor is left in a worse position following bail-in that they would have been in insolvency
The consultation also seeks industry views on three other issues:
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a proposal to align the creditor hierarchy of banks and building societies through early transposition of the depositor preference provisions on the Bank Recovery and Resolution Directive (BRRD)
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a proposal to implement changes to the Financial Collateral Arrangements Directive (FCAD) as set out in the BRRD
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applying the bail-in tool to banking group companies
The UK government is committed to fully transposing the EU Bank Recovery and Resolution Directive Directive by 1 January 2015 and does not intend to take advantage of the option of delaying the application of bail-in until 2016.
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