IX Provisional Administration Under the Banking Law


Provisional administration, or conservatorship as it is sometimes called, is a bank administration procedure for managing and operating a bank in distress back to compliance with prudential requirements, or for preserving the value of the bank while it is being prepared for the transfer to another institution by sale or merger, or for liquidation. Although its objective is largely corrective in nature, it should be distinguished from other corrective action in that it requires taking control of a bank. It should also be distinguished from receivership whose main goals are to minimize the systemic effects of a bank failure and to preserve the value of a bank for its creditors.