Santander United Kingdom It is the only major UK bank whose feasibility report in the event of a decision has not received any recommendation from Bank of England.
The eight largest banks operating in the United Kingdom –HSBCAnd the BarclaysAnd the Lloyd’sAnd the natwestAnd the nationallyAnd the Santander United KingdomAnd the Standard CharteredAnd the Virgin Money– They had to submit to the Bank of England credentials on their management in the event of dissolution and bankruptcy, a measure adopted in the country after the economic and financial crisis that emerged in 2008.
The Bank of England published on Friday first evaluation On the level of foresight and action by the largest entities in the state in the event of settlement, and concluded that for the time being, any of them can go bankrupt without affecting the rest of the financial system, although it noted that “improvements are still necessary.”
The eight largest banks in the UK had to appear in their documents to the Bank of England Have sufficient financial resources in case of dissolution; be able to keep up with activity in the event of a severe financial stress situation; And you are able to Communicate effectively internally, with authorities and markets.
“Santander UK is confident in its ability to achieve the results required to support an orderly decision,” the entity says in its documents to the Bank of England.
The British branch of Santander explains that in the case of dissolution, She will be separated from her womband that it will be divided into subgroups that can be solved individually.
Santander UK notes that “special barrier»The one he faces in the event of a decisive event, is his relationship with Santander. The bank claims that it is “legally and operationally separable from the parent company” and that the interconnection between Santander UK and Santander is “clearly monitored and documented”.
In its assessment report released on Friday, the Bank of England concluded that the country’s eight largest financial institutions “You have already overcome the past existence problem too big to fall».
But when evaluating the position of each of the eight banks in response to a decision, the Bank of England makes recommendations or points out certain weaknesses that have been discovered, Except in the case of Santander UK, where no room for improvement has been identified.
For example, in the case of HSBC, the Bank of England warned “lack of funding“as well as in”restructuring planning». At Standard Chartered, there is ‘room for improvement’ in the area of Management, Governance and Communication from the entity. Or in Virgin Money, where the potential for optimization is revealed in «The Comprehensive planning capabilities».
Crisis lessons
The objective of the British regulations to dissolve a financial institution is Avoid public support to a troubled bank. The Bank of England ensures that losses are borne by shareholders and creditors, and that affected banks can guarantee essential services to their customers while they are restructured, sold or liquidated.
In its assessment of the settlement capacity of the eight largest banks operating in the United Kingdom, which was reported on Friday, the Bank of England notes that in 2008, when the global financial crisis erupted, there was no such thing as now, and that the choice had to be made between leaving the banks Fail “or bail it out with taxpayer money”.
The UK had to use 137 billion pounds of public funds To stabilize the financial system. The Bank of England warned in its report released on Friday, “Nevertheless, the UK has not been immune to a global recession.” «We can’t forget these lessons“, Confirms.
Now, as the Bank of England says, banks are “in a better position”, and in case of dissolution “customers can continue to access their accounts and services as normal, shareholders and investors will pay losses, Not by taxpayers».
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