Resolution: Difference between revisions
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<i>Bank resolution | <i>Bank resolution</i> | ||
The special process of resolving the problem of the actual or threatened insolvency of financial firms. | The special process of resolving the problem of the actual or threatened insolvency of financial firms. | ||
The speed with which value destruction occurs in a failing financial firm means that normal corporate insolvency processes and liquidation are inappropriate for such firms. | The speed with which value destruction occurs in a failing financial firm means that normal corporate insolvency processes and liquidation are inappropriate for such firms. | ||
Revision as of 23:40, 23 November 2016
Bank resolution
The special process of resolving the problem of the actual or threatened insolvency of financial firms.
The speed with which value destruction occurs in a failing financial firm means that normal corporate insolvency processes and liquidation are inappropriate for such firms.
As in normal insolvency, losses will be expected for some creditors.
Resolution is the orderly failure of a firm, under the control of the resolution authority.
Contrast with ‘recovery’ in which a financial firm facing difficulties is returned to acceptable financial health without imposing losses on the distressed firm's creditors.
See also
- Financial stability
- Resolution Authority
- Liquidation and Payout
- Insolvency
- OLA
- Key Attributes
- Bailin
- Recovery
- RRP
- Cash in the new post-crisis world
- Resolution plan
- Resolution weekend
