This section will examine in greater detail the circumstances leading to the decision by the United Kingdom authorities to close BCCI in July 1991. Particular attention will be given to the period during which a comprehensive restructuring programme was being developed with substantial financial support from Abu Dhabi, and to the reasons why that process was ultimately abandoned in favour of immediate closure.
The analysis will cover the detailed chronology leading to closure; the Abu Dhabi restructuring proposals and financial commitments; the Price Waterhouse investigation and Section 41 report; the role of the College of Regulators; developments between 1 and 5 July 1991; the actions and decision-making of the Bank of England; the extent of UK Government involvement; and the subsequent findings and limitations of the Bingham Report.
It will also examine what information concerning BCCI's losses, problem loans and irregularities was already known before the Section 41 report, what genuinely new matters emerged, and whether the problems identified could have continued to be addressed within the restructuring programme.
The purpose is not to dispute the need for regulatory intervention, but to examine the more specific and still important question of why restructuring gave way to closure, what alternative courses of action remained available, and whether the decision to close BCCI was subjected to sufficiently independent and comprehensive scrutiny.
A number of unresolved questions arising from the events immediately preceding 5 July 1991 will therefore require detailed analysis before an objective assessment of the decision to close BCCI can be made.
