Here’s a quick video summary of the Reserve Bank Of New Zealand’s Open Bank Resolution (OBR) scheme. Implemented in June 2013 as an alternative to a government (i.e. tax payer) bail out of any failed bank in New Zealand, this rather innocuous sounding name actually means a Cyprus like bank “bail in” or depositor “Hair cut” as a means of getting sufficient capital to keep a failing bank operating.
We’ve actually written about this quite a bit over the past two and a bit years, but a request from a reader finally prompted us to turn these into a short video as well.
So if you don’t know too much about this topic we’d suggest you also check out the links below to the previous articles we’ve written as well:
This RBNZ website page has numerous links and information on the OBR:
This document from the RBNZ explains the whole scheme and what the banks must do to prepare for it.
This ‘OBR Made Simple’ fact-sheet (PDF 1.4MB) explains the OBR and how it works.
Offshore funding chart in the video from: