Regulatory Alerts2022-05-17
Reserve Bank of New Zealand Open Bank Resolution Guidance
The Reserve Bank of New Zealand introduces Open Bank Resolution (OBR) as an emergency tool to manage bank failures while maintaining financial system stability. The process requires large locally incorporated banks to prepare IT systems for a mechanism that allows re-opening the next day with government-guaranteed access to most depositor funds. This approach minimizes economic disruption by avoiding prolonged liquidation periods and reducing the likelihood of taxpayer-funded bailouts.
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