BRIDGE BANK AND BAD BANK TOOLS IN EU. AN EFFICIENCY ASSESSMENT CASE STUDY

The financial turmoil that disrupted the functioning of the banking systems across EU has revived the international debates related to developing proper mechanisms for the orderly recovery and resolution of failing banks. The paper provides an insight into the regulatory initiatives launched by the European Commission, the Financial Stability Board or the World Bank and outlines the current status of the national options related to a particular resolution tool. The second part of the paper empirically assesses the extent to which the bad bank schemes implemented since the end of 2009 in two EU countries (Ireland and Germany) achieved their purpose, of running the wind-up activity efficiently, by employing a nonparametric technique.