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Deposit Takers Act 2023

Crisis management and resolution - Resolution of licensed deposit takers and associated persons

282: End of resolution

You could also call this:

"When a bank is no longer in trouble and its problems are solved, that's the end of resolution."

Illustration for Deposit Takers Act 2023

The Governor-General can decide that a bank or a related person is no longer in a special kind of trouble called resolution. This happens when the Minister advises the Governor-General to make this decision, based on a recommendation from the Bank. You can think of the Bank like a referee who helps make big decisions about banks. The Bank's recommendation is not needed if public money is involved in the resolution, which is explained in section 349(2). This means the Governor-General can make the decision without the Bank's input in certain situations.

If the Bank asks for a bank or related person to be put into liquidation, it is also no longer in resolution. Liquidation is when a company's assets are sold to pay off debts. The resolution ends at a specific date and time, which is decided by the Governor-General, or when the liquidation starts.

When the Governor-General decides a bank is no longer in resolution, its subsidiaries are also no longer in resolution, unless they are specifically excluded from the decision. Subsidiaries are like smaller companies owned by the bank. This change happens at the same date and time as the bank's resolution ends.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS535253.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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281: Grounds on which associated person may be declared to be in resolution, or

"When can someone linked to a bank be put into resolution to fix problems?"

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283: Application of resolution provisions to other persons in resolution, or

"Rules for some businesses also apply to other related people in similar situations."

Part 7Crisis management and resolution
Resolution of licensed deposit takers and associated persons

282End of resolution

  1. The Governor-General may, by Order in Council, on the advice of the Minister given in accordance with a recommendation of the Bank, declare that a licensed deposit taker or an associated person that is in resolution is no longer in resolution.

  2. Despite subsection (1), the recommendation of the Bank is not required if public money is involved in the resolution (within the meaning of section 349(2)).

  3. A licensed deposit taker or an associated person is also no longer in resolution if it is put into liquidation on the application of the Bank.

  4. The resolution ends,—

  5. in the case of subsection (1), at the date and time specified in the Order in Council; or
    1. in the case of subsection (3), at the commencement of the liquidation.

      1. If an Order in Council declares that a licensed deposit taker is no longer in resolution, every subsidiary of the deposit taker, except a subsidiary specified in the order, is also no longer in resolution (with effect at the same date and time specified under subsection (4)(a)).

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