Resolution

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Bank resolution.

The special process of resolving the problem of the actual or threatened insolvency of financial firms.

The speed with which value destruction occurs in a failing financial firm means that normal corporate insolvency processes and liquidation are inappropriate for such firms.

As in normal insolvency, losses will be expected for some creditors.


Contrast with ‘recovery’ in which a financial firm facing difficulties is returned to acceptable financial health without imposing losses on the distressed firm's creditors.


See also


Other links

The Bank of England's approach to resolution, October 2014