Chapter 2 of the discussion paper outlined the current arrangements for dealing with banks in distress and for depositor protection and made some observations surrounding the way they have performed recently under challenge. This chapter explores two key areas where the Government may wish to introduce reforms, in order to give depositors the
confidence that is a necessary underpinning of financial stability:
Chapter 2 also set out the objectives the Government believes any reforms should meet. In particular, in assessing the case for any further reforms, the Government will balance the need to provide an appropriate level of consumer protection, and the need to have regard to the impact of any new regime on wider markets and the economy.