The Banking (Special Provisions) Act 2008 (c 2) is an
Act of the
Parliament of the United Kingdom
The Parliament of the United Kingdom is the supreme legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It meets at the Palace of Westminster, London. It alone possesses legislative suprema ...
that entered into force on the 21 February 2008 in order to enable the UK government to
nationalise
Nationalization (nationalisation in British English) is the process of transforming privately-owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization usually refers to pri ...
high-street banks under emergency circumstances by
secondary legislation
Primary legislation and secondary legislation (the latter also called delegated legislation or subordinate legislation) are two forms of law, created respectively by the legislative and executive branches of governments in representative democra ...
. The Act was introduced in order to nationalise the failing bank
Northern Rock
Northern Rock, formerly the Northern Rock Building Society, was a British bank. Based at Regent Centre in Newcastle upon Tyne, United Kingdom, Northern Rock was originally a building society. It demutualised and became Northern Rock bank i ...
after the bank was supported by
Bank of England
The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government of ...
credit and a private-sector solution was deemed "not to provide sufficient value for the taxpayer" by the UK government.
Opposition to the Act by the
Conservatives
Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization in ...
was based on: the Bill providing an exemption to the
Freedom of Information Act 2000
The Freedom of Information Act 2000 (c. 36) is an Act of the Parliament of the United Kingdom that creates a public "right of access" to information held by public authorities. It is the implementation of freedom of information legislation
...
, the large liabilities to the taxpayer and the alleged lack of independence from the government. The Bill was also sufficiently widely drawn to allow the nationalisation of any financial institution, leading to the concern that other banks might be in financial difficulty.
After the
nationalisation of Northern Rock
In 2008 the Northern Rock bank was nationalised by the British government, due to financial problems caused by the subprime mortgage crisis. In 2010 the bank was split into two parts (assets and banking) to aid the eventual sale of the bank back ...
, the Act allowed for the nationalisation of the mortgage and personal loan book of
Bradford & Bingley on 29 September 2008.
On 8 October 2008, the
Treasury
A treasury is either
*A government department related to finance and taxation, a finance ministry.
*A place or location where treasure, such as currency or precious items are kept. These can be state or royal property, church treasure or i ...
announced that an order under the Act was being used to transfer all retail deposits with
Heritable Bank, a UK-based banking subsidiary of the failing Icelandic bank
Landsbanki
Landsbanki (literally "national bank"), also commonly known as Landsbankinn (literally "the national bank") which is now the name of the current rebuilt bank (here called "New Landsbanki"), was one of the largest Icelandic commercial banks that f ...
, and
Kaupthing Edge to
ING Direct
The ING Group ( nl, ING Groep) is a Dutch multinational banking and financial services corporation headquartered in Amsterdam. Its primary businesses are retail banking, direct banking, commercial banking, investment banking, wholesale bankin ...
.
However section 2(8) of the Act provides that the Treasury may only make Transfer Orders under the Act for a maximum of a year after its passage.
[The Banking (Special Provisions) Act 2008]
section 2
/ref> The Act therefore expired on 21 February 2009, when it was superseded by the Banking Act 2009.
List of banks acquired/transferred under the Act
See also
* 2008 United Kingdom bank rescue package
References
External links
The Banking (Special Provisions) Act 2008
as amended from the National Archives.
The Banking (Special Provisions) Act 2008
as originally enacted from the National Archives.
Explanatory notes
to the Banking (Special Provisions) Act 2008.
{{2008 economic crisis
United Kingdom Acts of Parliament 2008
Great Recession in the United Kingdom
2008 in economics
Banking legislation in the United Kingdom