Ramsden outlines BoE's responsive resolution framework for growth
Dave Ramsden, Deputy Governor for Markets and Banking at the Bank of England, outlined the evolution of the Bank's resolution approach, emphasizing responsiveness and proportionality to support financial stability and economic growth. Speaking at King's College London, he highlighted lessons learned from recent bank failures and changes to the resolution framework.
Lessons from 2023's bank failures
Ramsden defined resolution as ensuring banks can fail orderly, providing critical services, protecting deposits, and reducing reliance on public funds.
He stressed that the Bank of England's approach has evolved to be highly responsive, a new key goal alongside credibility, feasibility, and effectiveness.
Lessons from the March 2023 failures of SVB UK and Credit Suisse highlighted the need for inherent flexibility.
Ramsden noted that risks to financial stability increased in 2025, driven by geopolitical tensions, market fragmentation, and sovereign debt pressures, underscoring the importance of robust resolution to absorb rather than amplify shocks.
Evolving tools for orderly failure
A credible resolution regime reduces bank capital requirements, fostering sustainable growth by lowering borrowing costs and encouraging investment.
The FPC's December 2025 assessment lowered the benchmark for system-wide Tier 1 capital requirements by 1 percentage point to around 13% of RWAs, attributing a 5 percentage point reduction to the UK's resolution regime.
Ramsden detailed three key changes from July 2025: increasing the asset threshold for resolution tools from £15-25 billion to £25-40 billion, clarifying transfer strategies for larger firms, and removing MREL requirements for firms designated for transfer, leveraging the new Bank Resolution (Recapitalisation) Act.