Bank Resolution and Insolvency

Bank Resolution and Insolvency

A sound bank resolution and insolvency system is key for ensuring a stable banking system. It allows authorities to avoid high costs associated with bank resolution and prevents complex cases of banks in pre-insolvency and insolvency states being escalated to a systemic crisis.

World Bank Response: As part of its development mandate, the World Bank, helps country authorities adopt a holistic approach towards bank resolution and insolvency by providing advice on design and implementation of an appropriately legal framework.

In providing advice, the World Bank shares with partner countries results of the Global Bank Insolvency Initiative, a two year consultative process with participation of about 100 countries, that set international guidelines for establishing a sound bank resolution and insolvency system. These guidelines lay foundations for conducting assessments and enhancement of bank resolution and insolvency systems in specific countries.