Parliamentary supremacy and Systemically Important Bank: Difference between pages

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''Law - UK''.
(SIB).


The historical legal principle in the UK that the UK Parliament was 'supreme' in its law-making powers.
A bank whose disorderly failure would, because of its:


This principle was fundamentally affected when the UK joined the European Union (EU) in 1973.
(i) Size,
 
 
Parliamentary supremacy meant that:
 
#The UK Parliament was able to make law for the UK as it saw fit either by repealing earlier statutes, over-ruling case law or by making new law.
#No UK Parliament could bind its successor.  Parliament could not make laws that a subsequent Parliament was prevented from altering or repealing.
#The courts in the UK had to apply the relevant statute law enacted by the UK Parliament.
   
   
(ii) Complexity, and


When the UK joined the EU, UK Parliamentary supremacy was fundamentally affected, and it was no longer true to say that only the UK Parliament had the power to make new law for the UK. 
(iii) Systemic interconnectedness
 
The effect of the UK becoming a member of the EU was to surrender the UK Parliament's supremacy on certain matters of European Union law which had direct effect on member states. 
 
 
This resulted in the position that: 


#The EU could pass legislation directly for the UK.
cause significant disruption to the wider financial system and to economic activity in its (main) country or region of operation.
#The UK could not, generally, make laws that conflict with EU law.
#Overall, EU law enjoyed supremacy over domestic national law and was applied in priority to domestic law.




The UK left the EU on 31 January 2020, subject to a transition period ending on 31 December 2020. The transition period enables further negotiations on the future relationship between the UK and the EU for the period after 31 December 2020.
For this reason, SIBs are subject to more stringent regulation and capital adequacy requirements than other institutions.




== See also ==
== See also ==
* [[Brexit]]
* [[Bank]]
* [[Brexit transition period]]
* [[BSBY]]
* [[European Union ]]
* [[Capital adequacy]]
* [[Sovereignty]]
* [[Financial institution]]
* [[Global SIFI]]
* [[Regulation]]
* [[Systemic risk]]
* [[Systemically Important Financial Institution]]  (SIFI)
* [[Too Big To Fail]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:Compliance_and_audit]]
[[Category:The_business_context]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]

Revision as of 16:26, 17 March 2022

(SIB).

A bank whose disorderly failure would, because of its:

(i) Size,

(ii) Complexity, and

(iii) Systemic interconnectedness

cause significant disruption to the wider financial system and to economic activity in its (main) country or region of operation.


For this reason, SIBs are subject to more stringent regulation and capital adequacy requirements than other institutions.


See also