A more thorough explanation:

A bridge bank is a type of national bank that is authorized to operate an insolvent bank for a limited period of time, usually up to three years or until the bank is sold. The purpose of a bridge bank is to provide a temporary solution to a failing bank, allowing it to continue operating while a more permanent solution is found.

When a bank is in danger of failing, the government may step in and create a bridge bank to take over its operations. For example, in 2008, the Federal Deposit Insurance Corporation (FDIC) created a bridge bank to take over the operations of IndyMac Bank, which had failed due to the subprime mortgage crisis. The bridge bank operated IndyMac until it was sold to a new owner.

Another example of a bridge bank is the Resolution Trust Corporation (RTC), which was created in the 1990s to manage the assets of failed savings and loan associations. The RTC operated as a bridge bank, taking over the operations of failed banks until they could be sold or liquidated.

These examples illustrate how bridge banks can help stabilize the banking system during times of crisis. By taking over the operations of failing banks, bridge banks can prevent a sudden collapse of the banking system and give regulators time to find a more permanent solution.