Bank resolution

Amendments to the Law on Banks (RS Official Gazette, Nos 107/2005, 91/2010 and 14/2015), applicable as of 1 April 2015, brought a new role to the NBS – that of a bank resolution authority. Namely, the NBS became responsible for the planning, initiation and implementation of the resolution of banks and banking groups under its jurisdiction, all with a view to protecting the public interest in the event of any problems in banks’ operations.

The resolution of banks and banking groups implies the implementation of resolution measures and tools by the NBS to avoid the adverse effects of the discontinuation of bank’s operations on financial stability, businesses and citizens, while minimising costs to the budget and other public funds. The resolution of banks and/or banking groups is an alternative to bankruptcy and liquidation proceedings, which is resorted to when estimated that the public interest would not be adequately protected, or that the termination of banks’ operations through regular bankruptcy or liquidation would give rise to significant negative effects on financial stability, businesses and/or citizens.