A bridge bank is an institution created by a national regulator or central bank to operate a failed bank until a buyer can be found. While national laws vary, the bridge bank is usually established by a publicly backed deposit insurance organisation or financial regulator and may be instituted to avoid systemic risk and provide an orderly transition avoiding negative effects such as bank runs.
A bridge bank is an institution created by a national regulator or central bank to operate a failed bank until a buyer can be found. While national laws vary, the bridge bank is usually established by a publicly backed deposit insurance organisation or financial regulator and may be instituted to avoid systemic risk and provide an orderly transition avoiding negative effects such as bank runs.
Source: Wikipedia "Bridge bank" · CC BY-SA 4.0
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