the uk ’ s progress on resolvability speech given by dave ramsden, deputy governor for markets and banking at the institute of chartered accountants in england and wales 26 february 2021 with thanks to anika duggal and amy lee for their assistance in preparing these remarks, and to bank colleagues including andrew bailey, adam cull, andrew hewitt, sasha mills, michael salib, ruth smith, tom smith and sam woods for their many helpful comments and suggestions. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice thank you for inviting me to come to speak at the virtual icaew. i can ’ t think of a better venue for my first speech on resolution – particularly because of the vital role which the accountancy profession plays in some of our key resolvability judgements and safeguards, which fundamentally underpin the credibility of the regime. the bank of england is the uk ’ s resolution authority ; within the bank i took on deputy governor level responsibility for resolution a year ago. it has been a fascinating time for me to take on this important responsibility, allowing me to contribute to the ongoing shaping of our resolution regime as it develops towards its immediate goal. that goal, a strategic goal for the bank, is ending ‘ too big to fail ’ by making sure the firms we supervise can fail in an orderly way no matter their size. put more practically we committed to parliament that major uk banks should be resolvable by 20221. that goal is central to the pra ’ s general objective to promote the safety and soundness of the firms we supervise, as well as to the bank ’ s financial stability objective of ensuring that the uk financial system can serve uk households and businesses in bad times as well as good. i want to use my speech today to set out my thinking on where our resolution framework has got to as we move closer to our 2022 commitment, and convey three key messages relating to that commitment. first, that progress towards the commitment reflects a regime which is built on robust and coherent principles : credibility, transparency, flexibility and proportionality. second, how we apply these principles to the operationalisation of our regime – specifically, through the resolvability assessment framework which is key to ensuring our resolvability regime is ‘ fit and ready ’ – fit for purpose and ready for use : and where there have been some important developments this week which i want to update you

the current covid crisis, the banking system has not just been resilient to the shock but, supported by the authorities ’ actions, has played its part in cushioning the shock, providing credit to help minimise longer - term scarring from the shock. although next week ’ s budget will update on the very significant fiscal impact of the shock, this will reflect the consequences of supporting households and business through this unprecedented period rather than supporting banks. while it is clear we have come a long way since 2008, we can ’ t just settle for making a promise that no bank will be ‘ too big to fail ’ : as resolution authority the bank must be able to deliver on that commitment. fundamental to that delivery, the uk now has the requisite statutory tools, and powers to underpin a credible bank resolution framework. these are set out transparently in the banking act 2009 and there are also known as the purple book, and subsequently updated in 2017. as set out in the december 2019 financial stability report. the december 2020 financial stability report sets out the fpc ’ s latest assessment. all speeches are available online at www. bankofengland. co. uk / news / speeches and @ boe _ pressoffice safeguards in place so that these powers can only be used in the right circumstances. these features allow market participants to have confidence in the integrity and predictability of our decision - making, which is supported by the uk ’ s strong and effective institutions. these powers also form an important complement to supervisory and prudential tools ; that these are embedded within the uk legal framework ensures they function as a credible and independent backstop for banks at risk of failure. flexibility and proportionality in implementation while a credible and transparent policy regime is necessary it requires flexibility and proportionality in development and implementation to ensure overall effectiveness of the regime. the bank is attuned to the ‘ proportionality problem ’ – we understand the need to balance the costs of operating in a complex regulatory environment with the benefits of having a diverse and competitive banking sector, as my colleague, sam woods, set out in his speech on the pra ’ s ‘ strong and simple ’ approach to regulation. 9 indeed as someone who is both a member of the prudential regulation committee and who has operational responsibilities of my own, i see both sides of this trade - off in action. as the resolution authority, our aim is to ensure firms can fail in an orderly way, whatever their size. to deliver