The Banking Act 2009 (c 1) 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 in part on the 21 February 2009 in order, amongst other things, to replace the

Banking (Special Provisions) Act 2008 The Banking (Special Provisions) Act 2008 (c 2) is an Act of the Parliament of the United Kingdom that entered into force on the 21 February 2008 in order to enable the UK government to nationalise high-street banks under emergency circumstances ...

. The Act makes provision for the nationalisation of banks, amends the law on bank insolvency and administration, and makes provision about the

Financial Services Compensation Scheme The Financial Services Compensation Scheme (FSCS) is the UK's statutory deposit insurance and investors compensation scheme for customers of authorised financial services firms. This means that FSCS can pay compensation if a firm is unable, or l ...

. It also makes provision about the regulation of inter-bank payment schemes (e.g. BACS), amends the law on the issue of banknotes by Scottish and Northern Irish banks, and makes other miscellaneous amendments to the law on banking.

Banknotes

Part 6 of the Act specifically deals with the right of certain commercial banks in

Scotland Scotland (, ) is a country that is part of the United Kingdom. Covering the northern third of the island of Great Britain, mainland Scotland has a border with England to the southeast and is otherwise surrounded by the Atlantic Ocean to the ...

and

Northern Ireland Northern Ireland ( ga, Tuaisceart Éireann ; sco, label= Ulster-Scots, Norlin Airlann) is a part of the United Kingdom, situated in the north-east of the island of Ireland, that is variously described as a country, province or region. Nort ...

to issue their own private banknotes, repealing the

Bank Notes (Scotland) Act 1845 A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand. Banknotes were originally issued ...

, the

Bankers (Ireland) Act 1845 {{Infobox UK legislation, short_title=Bankers (Ireland) Act 1845, type=Act, parliament=Parliament of the United Kingdom, long_title=An Act to regulate the Issue of Bank Notes in Ireland, and to regulate the Repayment of certain Sums advanced by the ...

and the

Bankers (Northern Ireland) Act 1928 The Bankers (Ireland) Act 1928 is an Act of the Parliament of the United Kingdom which amended the Bankers (Ireland) Act 1845 in application to Northern Ireland after the 1921 Partition of Ireland The partition of Ireland ( ga, críochdheig ...

. The 2009 Act empowers

HM Treasury His Majesty's Treasury (HM Treasury), occasionally referred to as the Exchequer, or more informally the Treasury, is a department of His Majesty's Government responsible for developing and executing the government's public finance policy and ec ...

to control banknote issue more strictly, requiring commercial note-issuing bank to maintain backing assets so that, in the event of the commercial failure of a bank, the value of their banknotes would be protected. The Act additionally prohibits the issue of banknotes by any other banks other than those authorised under the 1845/1928 legislation and the

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 ...

, and provides that, if a commercial bank decides to discontinue the issuing its own banknotes, it then irrevocably loses its note-issuing privileges.

References

External links

The Banking Act 2009
as amended from the National Archives.
The Banking Act 2009
as originally enacted from the National Archives.
Explanatory notes
to the Banking Act 2009. {{UK legislation United Kingdom Acts of Parliament 2009 2009 in economics Great Recession in the United Kingdom Financial regulation in the United Kingdom Banking legislation in the United Kingdom

Banknotes

See also

References

External links