RBNZ article says ‘open bank resolution’ helps keep banks in line
The Reserve Bank of New Zealand's (RBNZ) ‘open bank resolution' (OBR) policy seeks to ensure bank shareholders bear the losses associated with bank failure, while minimising the disruption to depositors, according to an article published today in the RBNZ's quarterly bulletin.
Authors Kevin Hoskin and Noemi Javier explain that OBR involves freezing a "conservative" portion of deposits to be used as necessary in resolving the bank, if losses imposed on shareholders are not sufficient. This allows
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