Financial services

Financial stability

A stable financial system inspires the confidence of businesses, investors and consumers, and underpins vital economic activity. This is why the Government has committed to introducing a new regulatory system in the UK, which will be better equipped to identify and deal with potential risks to the system in the future.

In recent years, the financial stability agenda has been dominated by the consequences of the global financial crisis that began in summer 2007. The financial crisis required various interventions from governments and finance ministries across the world to help bolster the financial system, increase lending and stimulate the world economy.

In the UK, the crisis involved a run on a high-street bank as well as the part-nationalisation of two of the largest banks in the world. During this time:

The previous Government intervened in a number of key UK financial institutions, including: Northern Rock, Royal Bank of Scotland, HBOS (which merged into the current Lloyds Banking Group) and Bradford & Bingley.
Most of the assets of the failed Dunfermline Building Society were transferred to Nationwide in order to protect depositors, by the Bank of England using the special powers granted by the Banking Act 2009.
Action was also taken during the financial crisis to protect UK depositors in Icelandic banks.

Current financial stability policy

The Treasury continues its work to improve the long-term health and structure of the financial system. Find out more about current policy to monitor financial stability as well as the UK’s exposure to the banks.

Financial stability

Current financial stability policy

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Financial Stability index