Any problem a bank is facing threatens the system’s stability, Cinteza said at a conference organized by BNR, Alpha Bank and Romanian banks association ARB.
The bridge bank – the latest concept of financial institution to be launched on the Romanian market – is a lending institution that could appear on the market when the central bank decides a bank of relevant size for the financial system can no longer cope on its own or rely on support from its majority shareholder.
In order to prevent a potential systemic shock, the BNR can decide that a bank’s assets and liabilities be transferred to the bridge bank for two years, and then be sold to a solid investor. This will ensure continuity of the bank’s activity and the clients of the troubled bank will not be affected.
The bank’s management will be made up of prominent figures with expertise in the financial-banking sector and will be approved by the central bank, with the bridge bank to be held by the Deposit Guarantee Fund.