The Federal Reserve and FDIC have released the public portions of the “living wills” of world’s leading banks, detailing as to what would happen if the business goes bankrupt.
The
banks under consideration are:
-1- Bank of America, -2- Barclays,
-3- Citigroup, -4- Credit Suisse,
-5- Deutsche Bank, -6- Goldman Sachs,
-7- JPMorgan Chase &
Co, -8- Morgan Stanley
-9- UBS
----------------------------------------------------------------
----------------------------------------------------------------
The
documents released, which are required under the 2010 Dodd-Frank Act, do not
provide any specific strategies or tactics which the banks would adopt if they
become insolvent.
The
wills vary from one business to another. U.S. regulators have not given any
comments on any of the ‘wills’. Their official feedback is expected to be
announced sometime in September.
Generally
speaking, the ‘wills’ state that the banks can be either:
-a-
Recapitalized or -b-
Dismembered or -c- Shut
down
-i- with
little to no cost to the taxpayer
OR
-ii-
burden will be transferred to the taxpayers
What the banks have said
JPMorgan: "The
Resolution Plan would not require extraordinary government support, and would
not result in losses being borne by the US government,"
CitiGroup: “[Our
plan] identifies a variety of actions that could be taken, each of which
demonstrates that Citi is resolvable in a manner that addresses potential
systemic disruption in the U.S. or global financial markets without the use of
taxpayer funds."
Your
Comments and Feedback are always appreciated
Half Bridge Business News
Relevant Links
Living Wills: Are banks just planning their own demise? [CNBC]
U.S. to reveal details on banks' living wills [Reuters]
Banks' 'Living Wills' Unveiled [Wall Street Journal]
Relevant Links
Living Wills: Are banks just planning their own demise? [CNBC]
U.S. to reveal details on banks' living wills [Reuters]
Banks' 'Living Wills' Unveiled [Wall Street Journal]
