Bridge Bank

DEFINITION of 'Bridge Bank'

A bank authorized to hold the assets and liabilities of another bank, specifically an insolvent bank. A bridge bank is charged with continuing the operations of the insolvent bank until the bank becomes solvent through acquisition by another entity or through liquidation. A bridge bank can be a national bank or a federal savings association chartered or appointed by the Federal Deposit Insurance Corporation (FDIC).

BREAKING DOWN 'Bridge Bank'

The FDIC was given authority to charter these temporary banks by the Competitive Equality Banking Act of 1987. The FDIC has the authority, using a bridge bank, to operate a failed bank for up to three years until a buyer can be found.

RELATED TERMS
  1. Purchase And Assumption - P&A

    A transaction in which a healthy bank or thrift purchases assets ...
  2. One-Bank Holding Company

    A corporation that holds at least a quarter of the voting stock ...
  3. Customer Information File (CIF)

    A computerized file that stores all pertinent information about ...
  4. Bank

    A financial institution licensed as a receiver of deposits. There ...
  5. Insolvency

    When an individual or organization can no longer meet its financial ...
  6. Federal Deposit Insurance Corporation ...

    The U.S. corporation insuring deposits in the U.S. against bank ...
Related Articles
  1. Retirement

    Bankruptcy Protection For Your Accounts

    Will the plan assets you've worked hard for be safe if you experience a personal financial crisis?
  2. Personal Finance

    Too Good To Be True: The Fall Of IndyMac

    Everything seemed to be going right for the bank giant, but it fell just as quickly as it had once risen.
  3. Bonds & Fixed Income

    An Overview Of Corporate Bankruptcy

    If a company files for bankruptcy, stockholders have the most to lose. Find out why.
  4. Options & Futures

    Who Backs Up The FDIC?

    The FDIC insures depositors against loss, but what happens if it runs out of money?
  5. Economics

    The 2007-08 Financial Crisis In Review

    Subprime lenders began filing for bankruptcy in 2007 -- more than 25 during February and March, alone.
  6. Economics

    Lehman Brothers: The Largest Bankruptcy Filing Ever

    Lehman Brothers survived several crises, but the collapse of the U.S. housing market brought the company to its knees.
  7. Economics

    Why Enron Collapsed

    Enron’s collapse is a classic example of greed gone wrong.
  8. Stock Analysis

    The Top 5 Technology Penny Stocks for 2016 (QTM,AMKR)

    Discover why the technology sector is vital to investors, and learn more about five of the most promising technology penny stocks for investors in 2016.
  9. Economics

    3 Economic Challenges Russia Faces in 2016

    Learn about the three largest challenges facing the Russian economy in 2016. How will low oil prices and high inflation impact the Russian economy?
  10. Economics

    3 Economic Challenges Argentina Faces in 2016

    Learn about three challenges that the Argentine economy faces. How will President Macri manage capital controls, investor sentiment and fiscal deficit?
RELATED FAQS
  1. Are 401ks FDIC insured?

    The Federal Deposit Insurance Corporation (FDIC) works as a protector for customers when banks and financial institutions ... Read Full Answer >>
  2. Does the FDIC cover identity theft?

    When a third party gains access to your bank account and conducts transactions without your consent, the FDIC does not have ... Read Full Answer >>
  3. Does the FDIC cover credit unions?

    The Federal Deposit Insurance Corporation (FDIC) does not cover credit unions. The FDIC only insures deposits in banks and ... Read Full Answer >>
  4. Does the FDIC cover business accounts?

    Bank deposits owned by corporations, partnerships, limited liability companies (LLCs), and unincorporated associations, including ... Read Full Answer >>
  5. Are variable annuities FDIC insured?

    Variable annuities are not insured by the Federal Deposit Insurance Corporation (FDIC), which regulates only bank products. ... Read Full Answer >>
  6. Are variable annuities guaranteed?

    Because they are market-based, variable annuities do not come with inherent guarantees. Investors, however, may purchase ... Read Full Answer >>
Hot Definitions
  1. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  2. Discouraged Worker

    A person who is eligible for employment and is able to work, but is currently unemployed and has not attempted to find employment ...
  3. Ponzimonium

    After Bernard Madoff's $65 billion Ponzi scheme was revealed, many new (smaller-scale) Ponzi schemers became exposed. Ponzimonium ...
  4. Quarterly Earnings Report

    A quarterly filing made by public companies to report their performance. Included in earnings reports are items such as net ...
  5. Dark Pool Liquidity

    The trading volume created by institutional orders that are unavailable to the public. The bulk of dark pool liquidity is ...
Trading Center