Bank Recovery and Resolution Bill 2020

Closed 13 Dec 2019

Opened 5 Nov 2019

Feedback updated 6 Jan 2020

We asked

The consultation outlined the scope and content of the Bank (Recovery and Resolution) Bill 2020. The Bill is based on international standards already adopted by jurisdictions such as the United Kingdom, the Eurozone member states and Jersey, but is tailored to the Isle of Man’s needs where appropriate. This ensures that the Island will have the necessary procedures in place both to plan for the possibility of a future bank failure and the powers to intervene appropriately in such a situation. The Bill was developed following a significant period of engagement involving the Treasury, the Isle of Man Financial Services Authority, IoM licensed banks and their professional advisers. The consultation was thereafter issued for wider comment and observation.

You said

A total of six responses were received:

  • One respondent provided no comments on the consultation
  • One respondent provided an overall comment on the consultation
  • Two respondents provided comments to some of the questions and gave permission for their responses to be published anonymously (shown in the attached publication)
  • Two respondents provided comments on the consultation and asked that these not be published

The responses received were generally supportive of the objectives of the Bill. A number of responses commented on specific aspects of the Bill, with the majority of Parts of the Bill attracting no specific comments.

We did

Following consideration of the feedback gained during the consultation process, there will be some minor modifications to the draft Bill, to address non-material matters such as typographical errors. Thereafter, it is intended to progress the Bill into the branches of Tynwald early in 2020.

Results updated 7 Jan 2020

Files:

Overview

The consultation outlines the scope and content of the Bank (Recovery and Resolution) Bill 2020.

The Bill introduces a Bank Recovery and Resolution (BRR) legislative framework which will seek to:

  • Ensure the continuation of critical banking functions
  • Protect covered depositors and client assets
  • Avoid negative effects on financial and economic stability and
  • Minimise reliance on public financial support to failing banks

In addition, the Bill provides for speed and transparency and as much predictability as possible through legal and procedural clarity and advanced planning for orderly bank resolution.

This framework of the Bill is based on international standards already adopted by jurisdictions such as the United Kingdom, the Eurozone member states and Jersey, but is tailored to the Isle of Man’s needs where appropriate.

This ensures that the Island will have the necessary procedures in place both to plan for the possibility of a future bank failure and the powers to intervene appropriately in such a situation. This is particularly important as the Island may need to participate in a cross-border resolution of a banking group at some stage, given that the majority of banks operating here are headquartered in other jurisdictions.     

Why your views matter

The Bill has been developed following a significant period of engagement involving the Treasury, the Isle of Man Financial Services Authority, IoM licensed banks and their professional advisers.

The consultation is now issued for wider comment and observation but it is anticipated that the Bill will be of particular interest to all stakeholders in the banking profession and to their professional advisers and those persons involved with corporate insolvency matters.    

Response Process

The Treasury would welcome your views on these proposals through the consultation hub or by email to treasuryconsultations@gov.im. The closing date for the receipt of comments is 13 December 2019. Postal responses can alternatively be submitted to:

John Coyle
Senior Adviser – Bank Recovery and Resolution
c/o Isle of Man Financial Services Authority
P.O. Box 58
Finch Hill House
Douglas
Isle of Man
IM99 1DT

What happens next

Following analysis of responses to this consultation paper, the Treasury will issue a response document and a finalised Bill will then be introduced to the House of Keys at the earliest opportunity thereafter.

Areas

  • All Areas

Audiences

  • Anyone from any background

Interests

  • Legislation
  • Policies, strategies & plans
  • Finance