According to a new report the UK’s biggest banks are no longer too big to fail and could continue to provide vital services even if they are going through a crisis.

The Bank of England shared that all eight of the high street banks it had assessed would be able to fail without major knock-on effects, but it did find “shortcomings” in three of the banks’ plans.

It said in a statement on Friday (June 10): "Today’s publication shows that if a major UK bank failed today it could do so safely: remaining open and continuing to provide vital banking services to the economy."

"Shareholders and investors, not taxpayers, will be first in line to bear the costs, overcoming the ‘too big to fail’ problem.”

If this is proven true in a crisis, it could save the treasury billions of pounds.

UK banks could fail safely as they leave ‘too big to fail’ era behind (PA)UK banks could fail safely as they leave ‘too big to fail’ era behind (PA)

The aftermath of the 2008 financial crash, saw the Government being forced to use £137 billion of public money to prop up the banks, protecting shareholders and investors.

“Even despite that support, the disruption to the financial system contributed to the UK and global recession that followed. We cannot forget these lessons,” the Bank said.

It was this that sparked the need for the so-called resolvability tests which the Bank will now be performing every two years.

High street lenders will have to submit their plans to officials on what will happen in the event that they fail.

In the first publication, the Bank rated different parts of the banks’ plans.

Finding that there were no “deficiencies” or “substantive impediments” – the two worst assessments – in any of the plans.

Officials did identify “shortcomings” – the middle out of five scores – in how HSBC, Lloyds and Standard Chartered approached getting enough financial resources to be able to take the preferred path.

It also found two further shortcomings in the plans of HSBC and Standard Chartered.

There were six banks whose plans contained “areas for further enhancement,” the second-best assessment that the Bank could give.

These included two for Barclays, two for HSBC, one for Nationwide, two for Natwest, one for Standard Chartered, and three for Virgin Money.

Only Santander UK’s plan escaped unscathed from the Bank’s assessment.