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Forum Post: News Article: Living wills for megabanks released (& View documents)

Posted 8 years ago on July 3, 2012, 6:38 p.m. EST by minhaalma (28)
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View Pdf of actual documents here: http://www.federalreserve.gov/bankinforeg/resolution-plans.htm


Living wills for megabanks released

WASHINGTON (CNNMoney) -- Regulators took another step toward ending the era of "too big to fail" Tuesday, releasing so-called living wills, guidelines for unwinding nine of the largest banks doing business in the United States. Banks on Monday had to give regulators copies of their living wills, which will guide regulators on how to resolve a failing but systemically important bank. The Federal Reserve and Federal Deposit of Insurance Corp. released the summaries of these living wills for the megabanks.

The living wills are supposed to spell out exactly how regulators would halt business operations and sell parts of the bank should the bank spiral downward the way Lehman Brothers or Bear Stearns did in 2008. The banks generally state in their resolution summaries that -- in the unlikely situation they don't have enough capital in subsidiaries to cover claims -- money could be raised "by divesting in any of our lines of business," as the summary for JPMorgan Chase stated. However, the juicier details about which subsidiary or business line would get sold first are considered proprietary by banks. Regulators have agreed to keep those details secret. Federal Reserve Board Vice Chairman Dan Tarullo told lawmakers last month that he hopes the the living wills will reveal what holes remain in ending the era of too big to fail. "We're not just going to be able to say, gee, if something bad happens on Thursday, will they be able to resolve by Monday morning?" Tarullo said during a Senate Banking Committee hearing in June. "I think we're going to need to ask ourselves whether the drafting and review of the resolution plans shows us that there are structural elements or features of the organization that could be an impediment to achieving that."

Read entire article here: http://money.cnn.com/2012/07/03/news/economy/bank-living-wills/index.htm



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[-] 0 points by minhaalma (28) 8 years ago

Living wills documents from major banks released... most of OWS is not interested.

[-] 0 points by minhaalma (28) 8 years ago


News Article: Major banks say they are ready to go under

The US Federal Deposit Insurance and Federal Reserve released public summaries of plans for quick liquidation of nine of the world’s largest banks in the case of an emergency, without government bailouts. Complex financial firms with more than $250 billion in nonbank assets including J.P. Morgan Chase, Bank of America, Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley, Barclays PLC, Deutsche Bank, Credit Suisse and UBS were the first to prepare the worst case scenarios by July 1. In total, about 125 banks are expected to submit plans to the regulators by the end of 2013. Public summaries reveal that Morgan Stanley and Goldman Sachs plan to sell assets or stand-alone businesses to other financial firms, private-equity investors or insurance companies in the event of a collapse. Citigroup said its banking business could be split off from the parent company and recapitalized as a smaller bank. Credit Suisse plans to sell its businesses to hedge funds, banks and securities firms. Meanwhile Barclay’s paper is already out of date after the resignation Tuesday of CEO Bob Diamond and COO Jerry Del Missier. Banks are required to give the government the tools to wind them down in a case of failure under provisions of the Dodd-Frank financial reform law designed to end the practice of bailing out “too big to fail” banks by the state. The act aims to secure the financial system from turmoil such as followed the collapse of Lehman Brothers or Bear Stearns in 2008.

[-] 2 points by DKAtoday (33802) from Coon Rapids, MN 8 years ago

If you have not done so by now - then get your accounts closed and moved to a credit union. NOW.

[-] 0 points by minhaalma (28) 8 years ago

No one from OWS is interested in viewing the wills of major banks? Really?!