Descriptions
The Great Financial Crisis (GFC), which began in 2007 and whose effects are still being felt today, exposed weaknesses in the systems of problem bank intervention and resolution in many countries around the world. As a result, jurisdictions have been improving their frameworks and tools. This course covers the range of available tools in the late 2010s for intervention (enforcement actions, conservatorship / provisional administration, etc.), resolution (sale of business, bridge institution, asset separation, and bail-in), and bankruptcy / liquidation. When to intervene or resolve will also be stressed. The course will also cover emerging trends in the priority of claims in bank resolution, choosing the least-cost option, and the “single point of entry” concept for complex or multinational banking organizations. The basics of recovery plans (plans submitted by the bank to ensure the delivery of critical services while the bank attempts to recover from severe financial or non-financial problems) and resolution plans (plans developed by the banking supervisor, in consultation with the bank, to ensure the delivery of critical services in resolution) will also be explained and discussed. Case studies will show participants effective and ineffective attempts to intervene in and resolve problem banks in recent years.
