A stable financial system is a key ingredient for a healthy and successful economy. People need to have confidence that the system is safe and stable, and that it functions properly. It is also important that problems in particular areas do not lead to wider disruption across the financial system.

The Bank's role is to contribute to maintaining the stability of the UK financial system. It aims to identify and draw attention to potential vulnerabilities and risks and to assist in efforts to ensure the system remains resilient and risks are reduced.

In the light of the recent financial market turmoil, the new Banking Act increases the responsibilities, powers and role of the Bank. A key part of the Act is the creation of the Special Resolution Regime to provide the tripartite authorities - HM Treasury, Bank and Financial Services Authority - with a framework to deal with distressed banks.