Purchase and Assumption: Difference between revisions
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''Bank resolution''. | |||
(P&A). | (P&A). | ||
A term used in the resolution of failed banks. | A term used in the resolution of failed banks. | ||
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Simple P&A involves splitting a distressed bank into ‘good’ and ‘bad’ parts. | Simple P&A involves splitting a distressed bank into ‘good’ and ‘bad’ parts. | ||
The distressed bank’s deposit book is sold to a third party together with some cash injected by the Deposit Guarantee Scheme (DGS) and possibly other good assets. | |||
The deposit book and cash might for a while be held in a Bridge Bank controlled by the Resolution Authority (RA), pending sale to a purchaser. | The deposit book and cash might for a while be held in a Bridge Bank controlled by the Resolution Authority (RA), pending sale to a purchaser. | ||
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The bad part of the failed bank goes into administration, with the administrators selling what they can and winding down the rest. | The bad part of the failed bank goes into administration, with the administrators selling what they can and winding down the rest. | ||
== See also == | == See also == | ||
* [[Bad bank]] | |||
* [[Bridge Bank]] | * [[Bridge Bank]] | ||
* [[Deposit Guarantee Scheme]] | * [[Deposit Guarantee Scheme]] | ||
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* [[Multiple Point of Entry]] | * [[Multiple Point of Entry]] | ||
* [[Resolution Authority]] | * [[Resolution Authority]] | ||
[[Category:Accounting,_tax_and_regulation]] | |||
[[Category:The_business_context]] | |||
Latest revision as of 07:38, 2 July 2022
Bank resolution.
(P&A).
A term used in the resolution of failed banks.
Simple P&A involves splitting a distressed bank into ‘good’ and ‘bad’ parts.
The distressed bank’s deposit book is sold to a third party together with some cash injected by the Deposit Guarantee Scheme (DGS) and possibly other good assets.
The deposit book and cash might for a while be held in a Bridge Bank controlled by the Resolution Authority (RA), pending sale to a purchaser.
Services to insured depositors are sustained.
The bad part of the failed bank goes into administration, with the administrators selling what they can and winding down the rest.
