Question
1) Consider the split of an unviable bank into a Good Bank and a Bad Bank in a country called BlueLand. At this stage you
1) Consider the split of an unviable bank into a Good Bank and a Bad Bank in a country
called BlueLand. At this stage you have not offered the Good Bank to any banks within
BlueLand to purchase or merge. As a consultant to the BlueLand bank regulator,
explain the strategy you would suggest to ensure a smooth sale of Good Bank.
2.) With a bank merger, when considering the bank that will be taken over i.e. Unviable
Bank, which assets in the Balance Sheet will have an adjusted figure? Which liabilities
will have an adjusted figure? Explain your reasoning.
3 )When banks merge what are the impacts on overall staff numbers and computer
systems?
4) Explain the ice-cream theory of bank resolution and how it is important in the workout
of a bank that is troubled.
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