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Banking association with benchmarks for the rehabilitation of financial institutions


BERLIN (Dow Jones) – The Federal Association of German Banks (BdB) On Monday, key issues for the rehabilitation of the financial sector Published by which systemic risks for the sector in future to be prevented. Is proposed that a of the Banking Association Three-phase model, which will apply to all companies in the financial sector, "may give rise to systemic risk," as stated in the BdB approach is located in the goal with already become known representations of the federal government covers.
Is foreseen in the Bank paper in phase one, an improved Crisis prevention, notably through a methodology used by the companies Emergency planning, as well as an advance on their own responsibility außerinsolvenzliche remediation to be carried out. If failure of these Efforts should according to the concept as a second phase, a renovation and Restructuring processes are set in motion, the bankruptcy of systemically relevant parts of the Company should avoid.
The areas of a systemically important bank should be temporarily transferred to a "bridge bank" can, and ultimately splitting into a "good will bank ‘, which will be disposed of and settled in parts be made. Accordingly, sees three phases of the plan before that in a general bankruptcy procedure, the parts of the company are handled, are not systemically.
The Bankers’ Association said the plan could be for all Institutions are, could cause systemic risks. Reflections of the government relate mainly to large internationally active banks, criticized the BdB. "The limitation of these so-called systemic Institutions but falls short and is not suitable for systemic risk effectively counteract, "emphasized the association.
The federal government already plans to introduce regulatory instruments for restructuring banks and systemically one insolvency proceedings for this reorganization Banks and will do so on Wednesday a key issues paper for an "Bill on the restructuring of banks and the participation of Financial sector to the costs of financial crises, to decide. "
It foresees, among other things, the fact that systemically Parts a bank’s future on a private third party or to a State "bridge bank" to be transferred can to the part to avoid systemic Financial market disruptions continue, and the liquidation of the remaining, not to provide system-operating parts. With a special Reorganization procedures for systemically important banks is also a clean-up Negotiation will be achieved.


Website: www.bankenverband.de

-By Andrew Kißler, Dow Jones Newswires, +49 (0) 30 - 2888
andreas.kissler @ dowjones.com
DJG / ank / kth
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March 29, 2010 07:24 ET (11:24 GMT)

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