Introduction to Problem Banks eBook

Overview of an Orderly Bank Closure

Step 3 – Day of Closure

• On the day of the closure, the licensing agency will go to the bank, serve papers of seizure, and tender the seized bank to the FDIC.

• The FDIC will announce the winning bidder, and the bank will open on Monday under that bank’s name.

Overview of a Fast Failure

• Decline happens so quickly, DRR is not ready. • Usually happens because of liquidity. • Often results in some sort of bridge bank.