The Banking Act 2009 (c 1) is an
Act of the
Parliament of the United Kingdom
The Parliament of the United Kingdom is the Parliamentary sovereignty in the United Kingdom, supreme Legislature, legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It meets at the Palace of We ...
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 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 li ...
. 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 Countries of the United Kingdom, country that is part of the United Kingdom. Covering the northern third of the island of Great Britain, mainland Scotland has a Anglo-Scottish border, border with England to the southeast ...
and
Northern Ireland
Northern Ireland ( ga, Tuaisceart Éireann ; sco, label=Ulster Scots dialect, Ulster-Scots, Norlin Airlann) is a part of the United Kingdom, situated in the north-east of the island of Ireland, that is #Descriptions, variously described as ...
to issue
their own private banknotes, repealing the
Bank Notes (Scotland) Act 1845, the
Bankers (Ireland) Act 1845 and the
Bankers (Northern Ireland) Act 1928. 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.
See also
*
2008 United Kingdom bank rescue package
In the period September 2007 to December 2009, during the events now widely known as the Global Financial Crisis, the UK government enacted a number of financial interventions in support of the UK banking sector and four UK banks in particular.
...
*
2009 United Kingdom bank rescue package
*
Bank Charter Act 1844
The Bank Charter Act 1844 (7 & 8 Vict. c. 32), sometimes referred to as the Peel Banking Act of 1844, was an Act of the Parliament of the United Kingdom, passed under the government of Robert Peel, which restricted the powers of British banks ...
*
Banknotes of the pound sterling
Sterling banknotes are the banknotes in circulation in the United Kingdom and its related territories, denominated in pounds sterling (symbol: £; ISO 4217 currency code: GBP; traditional abbreviation: Stg.).
Sterling banknotes are official ...
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 notesto 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