Financial Resolution Department
The Bank of Russia established the Financial Resolution Department in 2017 as part of the enhancement of the mechanism for preventing bankruptcy and financial resolution of the Russian banking sector. Beginning from 2019, the Department’s functions also comprise procedures for financial resolution of insurers.
The key objective of the Department is to develop and implement measures aimed at preventing credit institutions’ bankruptcy to be carried out with the participation of the Bank of Russia and the State Corporation Deposit Insurance Agency (DIA), measures for the settlement of credit institutions’ obligations, and measures preventing insurers’ bankruptcy to be carried out with the participation of the Bank of Russia.
The Department performs the full scope of functions involving the implementation of anti-bankruptcy measures. This includes the development, approval and follow-up of plans for the Bank of Russia’s participation in measures aimed at preventing credit institutions’ or insurers’ bankruptcy, as well as the examination of plans for the DIA’s participation in credit institutions’ anti-bankruptcy measures. This work comprises, among other things, the assessment of the amount and form of financial aid that may be granted by the Bank of Russia or the DIA to credit institutions and insurers within the implementation of anti-bankruptcy measures.
Another key function of the Department is the appointment of and control over the activity of provisional administrations appointed to implement anti-bankruptcy measures at credit institutions and insurance companies or to settle credit institutions’ obligations.
At the final stage of provisional administrations’ work, the Department ensures the establishment of permanent management authorities at credit institutions or insurance companies. After provisional administrations complete their work, the Department exercises supervision over the fulfilment of measures stipulated for an organisation by the plan for the Bank of Russia’s or the DIA’s participation in the implementation of anti-bankruptcy measures, and, where needed, provides appropriate coordination of the organisation’s operations.
The closing stage of the implementation of credit institutions’ and insurers’ anti-bankruptcy measures is the sale of credit institutions’ and insurers’ shares (stakes) and assets (property rights) acquired by the Bank of Russia, that is, their transfer to a new owner according to the procedures provided for by Russian laws. All organisational aspects and support of this work are within the competence of the Financial Resolution Department.