25.9 C
August 1, 2021

Bridge bank legal framework set up

The government has passed the legal framework allowing the bridge bank to take over the assets and liabilities of a credit institution threatened by bankruptcy, thus allowing their continuous operation and creditor payments. The Executive motivated its decision by the risks in the financial sector, Mediafax reports. The National Bank of Romania (BNR) has the means to put under special administration a troubled bank or to give the green light to a bank’s taking over the assets and assuming the liabilities of another bank. The bridge bank will be one of the three instruments available to the central bank in case a credit institution in danger of going bankrupt is deemed as a risk to the banking system as a whole.

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