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Home > Financial Stability > Previous resolutions under the Banking Act 2009
 

Previous resolutions under the Banking Act 2009

Previous resolutions under the Banking Act 2009  |  Resolutions prior to the Banking Act 2009

​The Banking Act 2009 created a resolution regime, with the Bank of England as resolution authority. To date there have been two resolutions under this regime, detailed below.

Dunfermline Building Society, 30 March 2009

The resolution of Dunfermline Building Society over the weekend of 28-29 March 2009 marked the first time that the Bank used its powers under the Banking Act 2009. Over that weekend (through a sales process conducted by the Bank of England), the retail and wholesale deposits, branches, head office and originated residential mortgages (other than social housing loans and related deposits) were transferred to Nationwide Building Society.

The decision to transfer parts of Dunfermline’s business to Nationwide was designed to protect depositors and safeguard financial stability. It follows a significant deterioration in Dunfermline’s financial position. The FSA determined on Saturday 28 March that Dunfermline was likely to fail to meet the FSA's threshold conditions for authorisation and that there was no other option available which would have enabled the company to
satisfy the threshold conditions.
 
For further information see the news releases on the right-hand side of this page and Key Resources below.
 
Southsea Mortgage and Investment Company Limited, 16 June 2011
 
The resolution of Southsea Mortgage and Investment Company Limited (Southsea) on the 16 June 2011 marked the second time that the Bank used its powers under the Banking Act 2009 and the first time that the Bank Insolvency Procedure (BIP) has been used.
 
Following a decision by the Financial Services Authority (FSA) to initiate the resolution regime, and a subsequent application to court by the Bank of England, Southsea Mortgage and Investment Company Limited (Southsea) was placed into the bank insolvency procedure and BDO LLP (BDO) was appointed bank liquidator. As of 16 June 2011 Southsea therefore ceased trading.
 
The failure of Southsea, a small bank with just over 250 depositors, follows a deterioration in its financial position as a result of management decisions and the firm’s specific business model. At failure, the firm had retail deposits of £7.4 million.
 
For further information see the links on the right-hand side of the page.

Key Resources

​Report under Section 80(1) of the Banking Act 2009 on the Dunfermline Building Society (DBS) Bridge Bank
22 July 2010
DBS Bridge Bank Limited Supplemental and Onward Property Transfer Instrument 2009
1 July 2009
Dunfermline Building Society Property Transfer Instrument 2009*
30 March 2009

* Note: The Dunfermline Building Society Property Transfer Instrument 2009 was amended by The Amendments to Law (Resolution of Dunfermline Building Society) (No.2) Order 2009 (the "Order"). The Order came into force on 7 July 2009 but the amendments made by the Order had effect from 8am on 30 March 2009 (being the time at which The Dunfermline Building Society Property Transfer Instrument 2009 came into force). The Order can be found at www.opsi.gov.uk.

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