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Home > Financial Stability > Carrying out a transfer of business
 

Carrying out a transfer of business

Carrying out a transfer of business  |  Carrying out a bail-in

​Using one or a combination of the transfer tools, the Bank can take alternative approaches to stabilising the failed firm at the point of failure, depending on the complexity of the firm and the market conditions at the point of failure. This can involve the transfer of all or part of a failed firm’s business, that is, its shares or its property.

Where there is a willing purchaser for the whole firm, the firm can be transferred in its entirety to that purchaser. This approach avoids the complexities of maintaining continuity of services when splitting the firm apart in resolution, for example separating deposits that are protected by the FSCS from those to be left behind in administration.

If there is no appropriate purchaser for the whole firm, the Bank can choose to transfer only the liabilities associated with the failed firm’s critical economic functions – such as protected deposits – to a purchaser, backed by good-quality assets.

If a purchaser cannot be found immediately, a bridge bank can be used to maintain the critical economic functions of a failed firm. This should facilitate the future sale of the business to one or more purchasers. It is inherently a temporary measure, and should only operate for as long as is needed to arrange a sale or an initial public offering. 

Any part of the firm that is not transferred to a purchaser or bridge bank, such as poor-quality assets and any remaining liabilities that are not linked to critical functions, would be placed into administration or an asset management vehicle.

In line with the ‘no creditor worse off’ safeguard, any shareholders and creditors directly affected by the resolution must not be left worse off than if the whole firm had been placed into insolvency.

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