Commentary on Sections Specific issues Section 220: Insolvency, &c
482.Subsection (1) provides that the regulations may make provision in connection with the application of the special resolution regime to an authorised bank, or a provision about insolvency (as defined in section 217(6)).
483.Subsection (2) provides that the banknote regulations may make provision for the destruction of un-issued and exchanged banknotes, and for the extinction of any claim to or interest in such banknotes.
484.Subsection (3) provides that the issuing rights of an authorised bank (as provided for in section 213) cannot be transferred or acquired, particularly in connection with anything done under Part 1 of this Act. This is consistent with the prohibition in this Part preventing any new commercial banks from issuing banknotes.
485.Subsection (4) is included to provide clarity concerning a bank taken into temporary public ownership. It ensures that, where an authorised bank is taken into temporary public ownership, that does not of itself deprive the bank from issuing notes. (However, if the bank is insolvent, then subsection (5) will deprive it of the right to issue notes).
486.Subsection (5) provides that an authorised bank that enters insolvency (within the meaning of section 217(6)) will lose the right to issue notes.
487.Subsection (6) provides that transitional provision in the banknote regulations may include provision for a case where a bank loses the right to issue notes.
488.Subsection (7) provides that a reference in this section to the “special resolution regime” includes a reference to any law of another country that the Treasury identifies in banknote regulations as serving a similar purpose.