[1][2] While national laws vary, the bridge bank is usually established by a publicly backed deposit insurance organisation or financial regulator and may be instituted to avoid systemic risk and provide an orderly transition avoiding negative effects such as bank runs.
If the bank cannot be sold as a going concern, its portfolio of assets are liquidated in an orderly fashion.
Under this situation, the NDIC is appointed as the receiver of the bridge bank's assets.
[5] Under the Competitive Equality Banking Act (CEBA) of 1987, the Federal Deposit Insurance Corporation (FDIC) is authorized to operate a failed bank for a period of up to three years, until a buyer can be found for its operations.
Under this situation, the FDIC is appointed as the receiver of the bridge bank's assets.