HM Treasury has published a revised memorandum of understanding (MoU) with the Bank of England and the Prudential Regulation Authority (PRA) setting out how the authorities will coordinate and share information on resolution planning and financial crisis management under the Banking Act 2009, the Financial Services Act 2012 and the Financial Services and Markets Act 2023. The MoU replaces the previous arrangements adopted in October 2017. The MoU confirms the Bank’s primary operational responsibility for financial crisis management and its role as the UK’s resolution authority, while reserving to the Chancellor and HM Treasury sole responsibility for decisions involving public funds, including authorising emergency liquidity assistance outside the Bank’s published frameworks and consenting to resolution actions with public-funds implications. It sets out the information-sharing process for resolution plans that contemplate use of stabilisation powers, including provision of draft plans and notification of material changes and updated assessments of risks to financial stability and public funds, alongside the public funds notification framework under section 58 of the Financial Services Act 2012. The document also describes coordination during a crisis, the Treasury’s statutory power of direction under section 61 (including indemnification and possible use of special purpose vehicles), expectations for advance sharing of draft Bank resolution-policy publications (generally at least 14 days before publication), coordination on subsidy control obligations, and arrangements for communicating with Parliament and the public, including notifications linked to Financial Services Compensation Scheme recapitalisation payments under the Bank Resolution (Recapitalisation) Act 2025.
HM Treasury 2025-09-01
United Kingdom's HM Treasury publishes updated crisis management and resolution planning MoU with the Bank of England and Prudential Regulation Authority
HM Treasury released a revised memorandum with the Bank of England and the Prudential Regulation Authority on resolution planning and crisis management under key financial acts. The MoU outlines the Bank's primary role in crisis management, while HM Treasury retains authority over public fund decisions. It specifies information-sharing, coordination during crises, and communication protocols with Parliament and the public.