Live News Updates: Bank of England says major UK lenders can now ‘safely’ fail

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Britain’s eight biggest banks have all developed plans that would allow them to fail “safely” without hurting taxpayers or customers, but should make further improvements to improve the process, the Bank of England said on Friday.

The exercise marked the first time supervisors have given their verdict on the resolvability plans of the UK’s eight largest banks and building societies, including Barclays, HSBC, Lloyds Banking Group, Nationwide, NatWest, Santander UK, Standard Chartered and Virgin Money UK.

The plans are the latest part of a package of measures to ensure bank failures are more orderly and less destructive than the global financial crisis of 2007. The resolvability element puts the responsibility on banks to ensure they are structured in a way that they can be safely shut down if they run into trouble without deserting taxpayers.

“Securing the resolution of a large bank will always be a complex challenge, so it is important that both we and the large banks continue to prioritize work on this issue,” said Dave Ramsden, deputy governor for markets and banks at the bank of England on Friday.

The central bank said it identified flaws in some of the companies’ plans, as well as “areas for further improvement”.

HSBC said that it has been asked to take steps to improve the resolvability of its international infrastructure, which spans 64 countries and territories.

“The changes that would be required to that infrastructure to support specific restructuring measures that might be required in a resolution would be complex,” the bank said, adding that the work would be carried out over a “multi-year period”.

Barclays said it has “identified some areas for further refinement, including continued optimization of processes and the use of automation where appropriate, which it will continue to push.”

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