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A primer on open bank resolution




The Reserve Bank supervises registered banks with the objective of promoting the maintenance of a sound and efficient financial system and avoiding significant damage to the financial system from the failure of a bank. While the Reserve Bank designs its prudential supervision to reduce the risk of banking failure, bank failures remain possible. It is therefore essential that there are robust processes in place to manage bank failures to minimise the costs and disruption to the financial system and the wider economy, whilst minimising the cost to the taxpayer of doing so. This article outlines the work that the Reserve Bank has been doing to implement its Open Bank Resolution (OBR) policy to meet these objectives, and explains how the policy would affect different parties were it necessary to use it in practice.

Suggested Citation

  • Kevin Hoskin & Ian Woolford, 2011. "A primer on open bank resolution," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 74, pages 5-10, September.
  • Handle: RePEc:nzb:nzbbul:sept2011:2

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    1. repec:pal:jbkreg:v:18:y:2017:i:3:d:10.1057_s41261-016-0006-z is not listed on IDEAS
    2. David G. Mayes, 2012. "Moral Hazard, Bank Resolution and the Protection of Depositors," Chapters,in: Research Handbook on International Banking and Governance, chapter 14 Edward Elgar Publishing.

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