Bankruptcy procedure is applied to the insolvent bank, when it hasn’t entirely honored its certain, liquid, and exigible debts, on a period of at least 30 days, or when the bank’s obligations value exceeds the value of its assets. Bankruptcy is declared by a tribunal which refers itself, as a result of a request introduced by the debtor bank or by its creditors. The procedure is launched after all special supervising measures have led to the impossibility to avoid bankruptcy.

After making all legal steps, the tribunal’s decisions are definitive and executive. They can be attacked with appeal. The managing organs or bank auditors can be subjects of third-part or penal liability if they have contributed to the bank’s bankruptcy. The question is if the bank guarantee fund covers current economic accounts. In conformity with the fund functioning rules, by deposit we understand any creditor balance, including owed interest, found in a bank account of any type, including common account. So, deposits of natural and legal persons, owners of current and economical accounts and of any other type of account, are guaranteed (money is given back) as far as they are integrated into the category of guaranteed deposits according to law.

The main cause of bank bankruptcy is the bank taking too many risks. Bank crisis have existed all over the world, both in low developed countries and states with powerful economy. These kind of problems, some more severe than others, have appeared in Latin America, some Asian countries, eastern Europe but also USA (in the middle of the 1980’s), and northern countries. The problems bank systems have confronted with in different regions of the world, during the last two decades, have imposed the searching of common aspects. Theoretically, there have been identified the following risks:

1. The market risk means that market conditions changes modify the actives value. The banks are exposed to huge market risks, especially when their portfolios are concentrated on economical sectors powerfully affected by succession.
2. The credit risk means that debtors do not want or cannot refund contracted credits. Liquidity risk represents the risk that deponents withdraw a large volume of funds from their accounts, and the banks do not detain enough liquid actives to satisfy these withdrawals.

Other important potential factors that can generate problems within bank systems are: the contagion effect (which can appear in the situation when the problems banks confront with, get to affect solid banks also, like supporting deponents’ tendency to withdraw deposits from banks), the moral hazard (which can be created when there are expectations for the bank risks to be taken over or absorbed by a third-party, like governments through public debt or international financial institutions).

The portfolio theory is the one according to which, relation between the bank net patrimony, the instability of winnings coming from the portfolio, and the functioning expenses, determines the risk that causes bank bankruptcy.