Effective asset management and disposition are a crucial aspect of problem bank resolution. The asset disposition department is comprised of all matters that have to do with actual asset liquidation (i.e., loan collection or sale, sale of own real estate owned, etc.). The liquidating authority is expected to maximize the return on the assets of the failed bank and minimize losses related to the failure. The primary goal of this department is to market the bank’s assets, liquidate them, and distribute the proceeds to claimants as prioritized by the law (see the section on claims in Chapter 6). Effective asset management and disposition include proper governance, transparency, and accountability, which can be strengthened with proper delegation of authority and decision-tracking, reporting, and filing systems.

Resolution Practices and Procedures