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...

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Main Authors:	Bolzico, Javier, Mascaró, Yira, Granata, Paola
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCESS TO FINANCE ACCESS TO INFORMATION ACCOUNT HOLDERS ACCOUNTABILITY ACCOUNTING ACCOUNTING POLICIES ACCOUNTING STANDARD ACCOUNTING STANDARDS ADMINISTRATIVE COSTS ASSET MANAGEMENT ASSET MANAGEMENT COMPANIES ASSET VALUE AUDITING AUDITS AUTONOMY BAD BANK BALANCE SHEET BALANCE SHEETS BANK ASSETS BANK CAPITALIZATION BANK DEPOSITS BANK FAILURE BANK FAILURES BANK FOR INTERNATIONAL SETTLEMENTS BANK LENDING BANK MANAGEMENT BANK RESTRUCTURING BANK SUPERVISION BANKING CRISES BANKING INDUSTRY BANKING INSTITUTIONS BANKING LAW BANKING PRACTICES BANKING SERVICES BANKING SUPERVISION BANKING SYSTEM BANKRUPTCY BANKS BEST PRACTICE BEST PRACTICES BONDS BUYER BUYERS CAPITAL ADEQUACY CAPITAL ADEQUACY RATIOS CAPITAL INJECTIONS CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CAPITAL STOCK CASH FLOWS CENTRAL BANK CIVIL LAW CLAIMANTS COMMERCIAL PAPER CONNECTED LENDING CONTINGENCIES CONTINGENCY CONTINGENCY PLAN CONTRIBUTIONS CREDIBILITY CREDIT CARD CREDIT CARD COMPANY CREDIT RATINGS CREDITORS CREDITS CROSS-SUBSIDIES CURRENT ACCOUNT DEBT INSTRUMENTS DEBTORS DEMAND DEPOSITS DEPOSIT DEPOSIT INSURANCE DEPOSIT INSURANCE SCHEMES DEPOSITOR DEPOSITORS DEPOSITS DEVELOPING COUNTRIES DEVELOPMENT BANK DISCLOSURE OF INFORMATION DISCLOSURE STANDARDS DIVERSIFICATION DOMESTIC BANK DUE DILIGENCE EARLY INTERVENTION ECONOMIC COSTS ECONOMIC CRISIS ECONOMIC MANAGEMENT ELIGIBILITY CRITERIA EMPLOYERS EQUITY SWAPS EXCLUSION EXPENDITURES EXTERNAL AUDITORS EXTERNAL CREDIT RATINGS EXTERNALITIES FEDERAL BANKS FINANCES FINANCIAL ASSISTANCE FINANCIAL COST FINANCIAL COSTS FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL LOSSES FINANCIAL PERFORMANCE FINANCIAL POSITION FINANCIAL RESOURCES FINANCIAL RESTRUCTURING FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STATEMENTS FINANCIAL SYSTEM FINANCIAL SYSTEMS GAMBLING GLOBALIZATION GOOD BANK GOVERNMENT FINANCES GROUP DEPOSITS GROUP OF BANKS GUARANTEE FUND HUMAN RESOURCES INCOME INFORMATION ASYMMETRIES INFORMATION REQUIREMENTS INFORMATION SHARING INSURANCE AGENCY INSURED DEPOSITS INTERNATIONAL ACCOUNTING STANDARDS INTERNATIONAL BANK INTERNATIONAL BANKS INVENTORY JUDICIAL SYSTEM LABOR COSTS LARGE BANK LARGE BANKS LAWS LEGAL AUTHORITY LEGAL FRAMEWORK LEGAL FRAMEWORKS LEGAL PROTECTION LEGISLATION LIABILITY LIQUIDATION LIQUIDATION VALUE LIQUIDITY LIQUIDITY ASSISTANCE LIQUIDITY POSITION LOAN LOCAL MEDIA MAJOR BANKS MANDATES MARKET DISCIPLINE MARKET ENVIRONMENT MARKET PARTICIPANTS MAXIMUM CONTRIBUTION MONETARY FUND MORAL HAZARD MORAL SUASION NET ASSET NET LOSSES NET VALUE NET WORTH ORIGINAL ASSETS OTHER ASSETS PAYMENT SERVICES PAYMENT SYSTEM PENSION PENSION ACCOUNTS PORTFOLIO PRACTICAL KNOWLEDGE PRACTICAL TIPS PRESENT VALUE PRESS RELEASES PRINCIPAL-AGENT PROBLEM PRIVATE BANKS PRIVATE FUNDS PRIVATE INVESTMENT PRIVATE INVESTMENTS PRIVATE INVESTORS PROBABILITY PROFITABILITY PUBLIC AGENCIES PUBLIC FUNDS PURCHASES QUALITY OF ASSETS QUESTIONNAIRES RECAPITALIZATION REGULATORY FRAMEWORK REORGANIZATION RESERVE RESERVE REQUIREMENT RESERVES RESPONSIBILITIES RETURN RIGHTS OF CREDITORS RISK ASSESSMENT RISK DIVERSIFICATION RISK MANAGEMENT RISK OF LOSS RISK PROFILE RISK TAKING SALE SALES SEIZURE SENIOR SENIOR BONDS SHAREHOLDER SHAREHOLDERS SMALL BANKS SOLE PROVIDER SOLVENCY STAKEHOLDERS START-UP STOCKS SUBORDINATED DEBT SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY SUPERVISORY POWERS SUPPLY OF CREDIT TERMINATION TIME DEPOSITS TOTAL COST TOTAL COSTS TRANSACTION TRANSPARENCY TRUST FUND TRUST FUNDS TRUSTEES TYPE OF PURCHASE UNEMPLOYMENT VALUABLE VALUE OF ASSETS WITHDRAWAL WORTH
Online Access:	http://documents.worldbank.org/curated/en/2007/11/8667097/practical-guidelines-effective-bank-resolution http://hdl.handle.net/10986/7548

id	okr-10986-7548
recordtype	oai_dc
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ACCESS TO FINANCE ACCESS TO INFORMATION ACCOUNT HOLDERS ACCOUNTABILITY ACCOUNTING ACCOUNTING POLICIES ACCOUNTING STANDARD ACCOUNTING STANDARDS ADMINISTRATIVE COSTS ASSET MANAGEMENT ASSET MANAGEMENT COMPANIES ASSET VALUE AUDITING AUDITS AUTONOMY BAD BANK BALANCE SHEET BALANCE SHEETS BANK ASSETS BANK CAPITALIZATION BANK DEPOSITS BANK FAILURE BANK FAILURES BANK FOR INTERNATIONAL SETTLEMENTS BANK LENDING BANK MANAGEMENT BANK RESTRUCTURING BANK SUPERVISION BANKING CRISES BANKING INDUSTRY BANKING INSTITUTIONS BANKING LAW BANKING PRACTICES BANKING SERVICES BANKING SUPERVISION BANKING SYSTEM BANKRUPTCY BANKS BEST PRACTICE BEST PRACTICES BONDS BUYER BUYERS CAPITAL ADEQUACY CAPITAL ADEQUACY RATIOS CAPITAL INJECTIONS CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CAPITAL STOCK CASH FLOWS CENTRAL BANK CIVIL LAW CLAIMANTS COMMERCIAL PAPER CONNECTED LENDING CONTINGENCIES CONTINGENCY CONTINGENCY PLAN CONTRIBUTIONS CREDIBILITY CREDIT CARD CREDIT CARD COMPANY CREDIT RATINGS CREDITORS CREDITS CROSS-SUBSIDIES CURRENT ACCOUNT DEBT INSTRUMENTS DEBTORS DEMAND DEPOSITS DEPOSIT DEPOSIT INSURANCE DEPOSIT INSURANCE SCHEMES DEPOSITOR DEPOSITORS DEPOSITS DEVELOPING COUNTRIES DEVELOPMENT BANK DISCLOSURE OF INFORMATION DISCLOSURE STANDARDS DIVERSIFICATION DOMESTIC BANK DUE DILIGENCE EARLY INTERVENTION ECONOMIC COSTS ECONOMIC CRISIS ECONOMIC MANAGEMENT ELIGIBILITY CRITERIA EMPLOYERS EQUITY SWAPS EXCLUSION EXPENDITURES EXTERNAL AUDITORS EXTERNAL CREDIT RATINGS EXTERNALITIES FEDERAL BANKS FINANCES FINANCIAL ASSISTANCE FINANCIAL COST FINANCIAL COSTS FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL LOSSES FINANCIAL PERFORMANCE FINANCIAL POSITION FINANCIAL RESOURCES FINANCIAL RESTRUCTURING FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STATEMENTS FINANCIAL SYSTEM FINANCIAL SYSTEMS GAMBLING GLOBALIZATION GOOD BANK GOVERNMENT FINANCES GROUP DEPOSITS GROUP OF BANKS GUARANTEE FUND HUMAN RESOURCES INCOME INFORMATION ASYMMETRIES INFORMATION REQUIREMENTS INFORMATION SHARING INSURANCE AGENCY INSURED DEPOSITS INTERNATIONAL ACCOUNTING STANDARDS INTERNATIONAL BANK INTERNATIONAL BANKS INVENTORY JUDICIAL SYSTEM LABOR COSTS LARGE BANK LARGE BANKS LAWS LEGAL AUTHORITY LEGAL FRAMEWORK LEGAL FRAMEWORKS LEGAL PROTECTION LEGISLATION LIABILITY LIQUIDATION LIQUIDATION VALUE LIQUIDITY LIQUIDITY ASSISTANCE LIQUIDITY POSITION LOAN LOCAL MEDIA MAJOR BANKS MANDATES MARKET DISCIPLINE MARKET ENVIRONMENT MARKET PARTICIPANTS MAXIMUM CONTRIBUTION MONETARY FUND MORAL HAZARD MORAL SUASION NET ASSET NET LOSSES NET VALUE NET WORTH ORIGINAL ASSETS OTHER ASSETS PAYMENT SERVICES PAYMENT SYSTEM PENSION PENSION ACCOUNTS PORTFOLIO PRACTICAL KNOWLEDGE PRACTICAL TIPS PRESENT VALUE PRESS RELEASES PRINCIPAL-AGENT PROBLEM PRIVATE BANKS PRIVATE FUNDS PRIVATE INVESTMENT PRIVATE INVESTMENTS PRIVATE INVESTORS PROBABILITY PROFITABILITY PUBLIC AGENCIES PUBLIC FUNDS PURCHASES QUALITY OF ASSETS QUESTIONNAIRES RECAPITALIZATION REGULATORY FRAMEWORK REORGANIZATION RESERVE RESERVE REQUIREMENT RESERVES RESPONSIBILITIES RETURN RIGHTS OF CREDITORS RISK ASSESSMENT RISK DIVERSIFICATION RISK MANAGEMENT RISK OF LOSS RISK PROFILE RISK TAKING SALE SALES SEIZURE SENIOR SENIOR BONDS SHAREHOLDER SHAREHOLDERS SMALL BANKS SOLE PROVIDER SOLVENCY STAKEHOLDERS START-UP STOCKS SUBORDINATED DEBT SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY SUPERVISORY POWERS SUPPLY OF CREDIT TERMINATION TIME DEPOSITS TOTAL COST TOTAL COSTS TRANSACTION TRANSPARENCY TRUST FUND TRUST FUNDS TRUSTEES TYPE OF PURCHASE UNEMPLOYMENT VALUABLE VALUE OF ASSETS WITHDRAWAL WORTH
spellingShingle	ACCESS TO FINANCE ACCESS TO INFORMATION ACCOUNT HOLDERS ACCOUNTABILITY ACCOUNTING ACCOUNTING POLICIES ACCOUNTING STANDARD ACCOUNTING STANDARDS ADMINISTRATIVE COSTS ASSET MANAGEMENT ASSET MANAGEMENT COMPANIES ASSET VALUE AUDITING AUDITS AUTONOMY BAD BANK BALANCE SHEET BALANCE SHEETS BANK ASSETS BANK CAPITALIZATION BANK DEPOSITS BANK FAILURE BANK FAILURES BANK FOR INTERNATIONAL SETTLEMENTS BANK LENDING BANK MANAGEMENT BANK RESTRUCTURING BANK SUPERVISION BANKING CRISES BANKING INDUSTRY BANKING INSTITUTIONS BANKING LAW BANKING PRACTICES BANKING SERVICES BANKING SUPERVISION BANKING SYSTEM BANKRUPTCY BANKS BEST PRACTICE BEST PRACTICES BONDS BUYER BUYERS CAPITAL ADEQUACY CAPITAL ADEQUACY RATIOS CAPITAL INJECTIONS CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CAPITAL STOCK CASH FLOWS CENTRAL BANK CIVIL LAW CLAIMANTS COMMERCIAL PAPER CONNECTED LENDING CONTINGENCIES CONTINGENCY CONTINGENCY PLAN CONTRIBUTIONS CREDIBILITY CREDIT CARD CREDIT CARD COMPANY CREDIT RATINGS CREDITORS CREDITS CROSS-SUBSIDIES CURRENT ACCOUNT DEBT INSTRUMENTS DEBTORS DEMAND DEPOSITS DEPOSIT DEPOSIT INSURANCE DEPOSIT INSURANCE SCHEMES DEPOSITOR DEPOSITORS DEPOSITS DEVELOPING COUNTRIES DEVELOPMENT BANK DISCLOSURE OF INFORMATION DISCLOSURE STANDARDS DIVERSIFICATION DOMESTIC BANK DUE DILIGENCE EARLY INTERVENTION ECONOMIC COSTS ECONOMIC CRISIS ECONOMIC MANAGEMENT ELIGIBILITY CRITERIA EMPLOYERS EQUITY SWAPS EXCLUSION EXPENDITURES EXTERNAL AUDITORS EXTERNAL CREDIT RATINGS EXTERNALITIES FEDERAL BANKS FINANCES FINANCIAL ASSISTANCE FINANCIAL COST FINANCIAL COSTS FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL LOSSES FINANCIAL PERFORMANCE FINANCIAL POSITION FINANCIAL RESOURCES FINANCIAL RESTRUCTURING FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STATEMENTS FINANCIAL SYSTEM FINANCIAL SYSTEMS GAMBLING GLOBALIZATION GOOD BANK GOVERNMENT FINANCES GROUP DEPOSITS GROUP OF BANKS GUARANTEE FUND HUMAN RESOURCES INCOME INFORMATION ASYMMETRIES INFORMATION REQUIREMENTS INFORMATION SHARING INSURANCE AGENCY INSURED DEPOSITS INTERNATIONAL ACCOUNTING STANDARDS INTERNATIONAL BANK INTERNATIONAL BANKS INVENTORY JUDICIAL SYSTEM LABOR COSTS LARGE BANK LARGE BANKS LAWS LEGAL AUTHORITY LEGAL FRAMEWORK LEGAL FRAMEWORKS LEGAL PROTECTION LEGISLATION LIABILITY LIQUIDATION LIQUIDATION VALUE LIQUIDITY LIQUIDITY ASSISTANCE LIQUIDITY POSITION LOAN LOCAL MEDIA MAJOR BANKS MANDATES MARKET DISCIPLINE MARKET ENVIRONMENT MARKET PARTICIPANTS MAXIMUM CONTRIBUTION MONETARY FUND MORAL HAZARD MORAL SUASION NET ASSET NET LOSSES NET VALUE NET WORTH ORIGINAL ASSETS OTHER ASSETS PAYMENT SERVICES PAYMENT SYSTEM PENSION PENSION ACCOUNTS PORTFOLIO PRACTICAL KNOWLEDGE PRACTICAL TIPS PRESENT VALUE PRESS RELEASES PRINCIPAL-AGENT PROBLEM PRIVATE BANKS PRIVATE FUNDS PRIVATE INVESTMENT PRIVATE INVESTMENTS PRIVATE INVESTORS PROBABILITY PROFITABILITY PUBLIC AGENCIES PUBLIC FUNDS PURCHASES QUALITY OF ASSETS QUESTIONNAIRES RECAPITALIZATION REGULATORY FRAMEWORK REORGANIZATION RESERVE RESERVE REQUIREMENT RESERVES RESPONSIBILITIES RETURN RIGHTS OF CREDITORS RISK ASSESSMENT RISK DIVERSIFICATION RISK MANAGEMENT RISK OF LOSS RISK PROFILE RISK TAKING SALE SALES SEIZURE SENIOR SENIOR BONDS SHAREHOLDER SHAREHOLDERS SMALL BANKS SOLE PROVIDER SOLVENCY STAKEHOLDERS START-UP STOCKS SUBORDINATED DEBT SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY SUPERVISORY POWERS SUPPLY OF CREDIT TERMINATION TIME DEPOSITS TOTAL COST TOTAL COSTS TRANSACTION TRANSPARENCY TRUST FUND TRUST FUNDS TRUSTEES TYPE OF PURCHASE UNEMPLOYMENT VALUABLE VALUE OF ASSETS WITHDRAWAL WORTH Bolzico, Javier Mascaró, Yira Granata, Paola Practical Guidelines for Effective Bank Resolution
relation	Policy Research Working Paper; No. 4389
description	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.
format	Publications & Research :: Policy Research Working Paper
author	Bolzico, Javier Mascaró, Yira Granata, Paola
author_facet	Bolzico, Javier Mascaró, Yira Granata, Paola
author_sort	Bolzico, Javier
title	Practical Guidelines for Effective Bank Resolution
title_short	Practical Guidelines for Effective Bank Resolution
title_full	Practical Guidelines for Effective Bank Resolution
title_fullStr	Practical Guidelines for Effective Bank Resolution
title_full_unstemmed	Practical Guidelines for Effective Bank Resolution
title_sort	practical guidelines for effective bank resolution
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2007/11/8667097/practical-guidelines-effective-bank-resolution http://hdl.handle.net/10986/7548
_version_	1764402488382849024
spelling	okr-10986-75482021-04-23T14:02:34Z Practical Guidelines for Effective Bank Resolution Bolzico, Javier Mascaró, Yira Granata, Paola ACCESS TO FINANCE ACCESS TO INFORMATION ACCOUNT HOLDERS ACCOUNTABILITY ACCOUNTING ACCOUNTING POLICIES ACCOUNTING STANDARD ACCOUNTING STANDARDS ADMINISTRATIVE COSTS ASSET MANAGEMENT ASSET MANAGEMENT COMPANIES ASSET VALUE AUDITING AUDITS AUTONOMY BAD BANK BALANCE SHEET BALANCE SHEETS BANK ASSETS BANK CAPITALIZATION BANK DEPOSITS BANK FAILURE BANK FAILURES BANK FOR INTERNATIONAL SETTLEMENTS BANK LENDING BANK MANAGEMENT BANK RESTRUCTURING BANK SUPERVISION BANKING CRISES BANKING INDUSTRY BANKING INSTITUTIONS BANKING LAW BANKING PRACTICES BANKING SERVICES BANKING SUPERVISION BANKING SYSTEM BANKRUPTCY BANKS BEST PRACTICE BEST PRACTICES BONDS BUYER BUYERS CAPITAL ADEQUACY CAPITAL ADEQUACY RATIOS CAPITAL INJECTIONS CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CAPITAL STOCK CASH FLOWS CENTRAL BANK CIVIL LAW CLAIMANTS COMMERCIAL PAPER CONNECTED LENDING CONTINGENCIES CONTINGENCY CONTINGENCY PLAN CONTRIBUTIONS CREDIBILITY CREDIT CARD CREDIT CARD COMPANY CREDIT RATINGS CREDITORS CREDITS CROSS-SUBSIDIES CURRENT ACCOUNT DEBT INSTRUMENTS DEBTORS DEMAND DEPOSITS DEPOSIT DEPOSIT INSURANCE DEPOSIT INSURANCE SCHEMES DEPOSITOR DEPOSITORS DEPOSITS DEVELOPING COUNTRIES DEVELOPMENT BANK DISCLOSURE OF INFORMATION DISCLOSURE STANDARDS DIVERSIFICATION DOMESTIC BANK DUE DILIGENCE EARLY INTERVENTION ECONOMIC COSTS ECONOMIC CRISIS ECONOMIC MANAGEMENT ELIGIBILITY CRITERIA EMPLOYERS EQUITY SWAPS EXCLUSION EXPENDITURES EXTERNAL AUDITORS EXTERNAL CREDIT RATINGS EXTERNALITIES FEDERAL BANKS FINANCES FINANCIAL ASSISTANCE FINANCIAL COST FINANCIAL COSTS FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL LOSSES FINANCIAL PERFORMANCE FINANCIAL POSITION FINANCIAL RESOURCES FINANCIAL RESTRUCTURING FINANCIAL SECTOR FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STATEMENTS FINANCIAL SYSTEM FINANCIAL SYSTEMS GAMBLING GLOBALIZATION GOOD BANK GOVERNMENT FINANCES GROUP DEPOSITS GROUP OF BANKS GUARANTEE FUND HUMAN RESOURCES INCOME INFORMATION ASYMMETRIES INFORMATION REQUIREMENTS INFORMATION SHARING INSURANCE AGENCY INSURED DEPOSITS INTERNATIONAL ACCOUNTING STANDARDS INTERNATIONAL BANK INTERNATIONAL BANKS INVENTORY JUDICIAL SYSTEM LABOR COSTS LARGE BANK LARGE BANKS LAWS LEGAL AUTHORITY LEGAL FRAMEWORK LEGAL FRAMEWORKS LEGAL PROTECTION LEGISLATION LIABILITY LIQUIDATION LIQUIDATION VALUE LIQUIDITY LIQUIDITY ASSISTANCE LIQUIDITY POSITION LOAN LOCAL MEDIA MAJOR BANKS MANDATES MARKET DISCIPLINE MARKET ENVIRONMENT MARKET PARTICIPANTS MAXIMUM CONTRIBUTION MONETARY FUND MORAL HAZARD MORAL SUASION NET ASSET NET LOSSES NET VALUE NET WORTH ORIGINAL ASSETS OTHER ASSETS PAYMENT SERVICES PAYMENT SYSTEM PENSION PENSION ACCOUNTS PORTFOLIO PRACTICAL KNOWLEDGE PRACTICAL TIPS PRESENT VALUE PRESS RELEASES PRINCIPAL-AGENT PROBLEM PRIVATE BANKS PRIVATE FUNDS PRIVATE INVESTMENT PRIVATE INVESTMENTS PRIVATE INVESTORS PROBABILITY PROFITABILITY PUBLIC AGENCIES PUBLIC FUNDS PURCHASES QUALITY OF ASSETS QUESTIONNAIRES RECAPITALIZATION REGULATORY FRAMEWORK REORGANIZATION RESERVE RESERVE REQUIREMENT RESERVES RESPONSIBILITIES RETURN RIGHTS OF CREDITORS RISK ASSESSMENT RISK DIVERSIFICATION RISK MANAGEMENT RISK OF LOSS RISK PROFILE RISK TAKING SALE SALES SEIZURE SENIOR SENIOR BONDS SHAREHOLDER SHAREHOLDERS SMALL BANKS SOLE PROVIDER SOLVENCY STAKEHOLDERS START-UP STOCKS SUBORDINATED DEBT SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY SUPERVISORY POWERS SUPPLY OF CREDIT TERMINATION TIME DEPOSITS TOTAL COST TOTAL COSTS TRANSACTION TRANSPARENCY TRUST FUND TRUST FUNDS TRUSTEES TYPE OF PURCHASE UNEMPLOYMENT VALUABLE VALUE OF ASSETS WITHDRAWAL WORTH 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. 2012-06-08T17:35:14Z 2012-06-08T17:35:14Z 2007-11 http://documents.worldbank.org/curated/en/2007/11/8667097/practical-guidelines-effective-bank-resolution http://hdl.handle.net/10986/7548 English Policy Research Working Paper; No. 4389 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research

Practical Guidelines for Effective Bank Resolution

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