Publication: Practical Guidelines for Effective Bank Resolution
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Published
2007-11
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Date
2012-06-08
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Abstract
This study adopts a practical approach in developing a set of guidelines on designing a bank resolution framework and implementing efficient bank resolution methods in Latin America. It identifies six pillars that are useful for establishing a bank resolution framework. The study aims to guide policymakers choose from a set of bank resolution methods, by outlining their advantages and disadvantages and establishing efficiency requirements. The focus is on the good-bank/bad-bank approach, which is a type of purchase and assumption mechanism that has increasingly become part of the newer legal frameworks in Latin America. The good-bank/bad-bank approach is an effective bank resolution method because it can be very successful in meeting certain efficiency criteria, including the minimization of contagion costs and preservation of business.
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“Bolzico, Javier; Mascaró, Yira; Granata, Paola. 2007. Practical Guidelines for Effective Bank Resolution. Policy Research Working Paper; No. 4389. © World Bank. http://hdl.handle.net/10986/7548 License: CC BY 3.0 IGO.”
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