People rely on banks in their day to day lives, whether it’s for looking after their money or helping them pay for things.
Not surprisingly, then, if banks stopped working, the entire economy would grind to a halt. It’s the Bank of England’s job to make sure that banks (and the entire financial system) continue to work in a safe and sound way.
As part of this, we put a lot of effort into reducing the chances of a bank getting into financial difficulty in the first place.
But it is not possible to prevent all banks from ever failing.
Just like any other type of business, it is important that a bank that doesn’t make a profit is able to fail.