Power of attorney is the authority given to a selected person by the owner, who performs all the activities, that is performed by the owner, in his absence. This is most prevalent in the real estate business. When the sole owner of the business becomes incapacitated, it becomes the responsibility of the other members in the family to take charge of the business. In case the owner has not signed any legal document authorizing any particular family member to take charge, there are chances of conflict within the family on who will take charge. Even if any one person is decided upon, he or she will not be able to act in place of the owner without being given any formal authorization.

All these issues can be solved by a simple ‘power of attorney’. The owner, by signing the power of attorney, nominates a representative who will take charge of the complete business in his absence. So, when the owner is incapacitated, there will not be any turmoil in the family as to the nominee since the representative is already chosen by the owner himself or herself.

Getting a power of attorney does not always mean that one is preparing for his or her death. It is also useful at other circumstances when you need someone to take care of your business or transactions and to act in your place as the owner. At times, the right to all real estate is also given along with the power of attorney if the owner deems fit.

The business owner can in certain point in time want to take a long vacation and go for a trip with his family. What happens to the business then? Who takes care of the business in the absence of the owner? Well, these are the times when the power of attorney plays a vital role. The person nominated by the owner, through the power of attorney, is the person who takes care of the business and handles all day to day transactions in the absence of the owner. So, the owner can enjoy a stress free vacation without having to worry about what is going on in his business.

The power of attorney is usually given to a family member, either the children, if they are old enough, or to any other family member who is capable of handling the business. There can be situations where none of the family members are in a position to handle the business then the power of attorney can be given to some other reliable person who is selected by the owner himself.

However, one must be very careful as to whom the power of attorney is given. Most of the times, these people after getting the power of attorney can take full control of the business and all the real estate and throw out the real owner. So, it is advisable to keep some restrictions while preparing the power of attorney, so that the owner can keep some control of the business with himself or herself, even if he or she is incapacitated.

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.