The Intervention Act provides new powers for DNB to intervene when a bank gets into difficulties.
As soon as the court agrees that a criterion for intervention has been fulfilled DNB may:
- sell a problem institution to a private party by transferring shares;
- transfer the deposits of a problem institution to a private party with funding from the deposit guarantee system
- transfer the assets and/or liabilities of a problem institution to a private party, thereby enabling the institution to be split into a good bank and a bad bank
If no private buyer is found, the transfer can be made to a bridging institution, which temporarily acquires all or parts of the problem institution.
The Intervention Act entered into force on 12 June. The new powers are in keeping with recent provisions to strengthen the crisis instruments in various European countries, and with the resolution policy recently announced by the European Commission and the Financial Stability Board (FSB).
More information about the Intervention Act.