Publication: Practical Guidelines for Effective Bank Resolution
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.
“Bolzico, Javier; Mascaró, Yira; Granata, Paola. 2007. Practical Guidelines for Effective Bank Resolution. Policy Research Working Paper; No. 4389. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/a47d0c33-424c-588e-8222-b41558a57406 License: CC BY 3.0 IGO.”
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