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Chapter 5 Moratorium powers

Closed
11 August 2020

Amendments to the 'in-resolution' moratorium power

5.1 Under Article 69 of BRRD, the Bank of England currently has the power to suspend the payment and delivery obligations of a firm which is in resolution, in order to allow some space to facilitate the application of resolution tools. The UK previously transposed this in-resolution moratorium power through the creation of new sections 70A and 70D of the Banking Act 2009.

5.2 BRRDII amends Article 69 of BRRD to extend the scope of this 'in-resolution' moratorium power to permit the suspension of eligible deposits.

5.3 The Directive specifies that resolution authorities should assess carefully the appropriateness of applying this power to eligible deposits, and in particular covered deposits held by natural persons and micro, small and medium-sized enterprises.

5.4 Where this suspension power is exercised in respect of eligible deposits, states subject to BRRD may provide that resolution authorities ensure that depositors have access to