Fed, FDIC Release Glimpse of Banks' 'Living Wills'
07/03/2012| 02:26pm US/Eastern
By Jessica Holzer
WASHINGTON--Nine large banks on Tuesday provided a glimpse of road maps they have prepared to quickly liquidate themselves in a crisis.
The plans, known as "living wills", were mandated by the 2010 Dodd-Frank financial overhaul law to help end the perception that firms are "too-big-to-fail," so large and complex that the government would choose to rescue them in a crisis to prevent them from failing and potentially dragging down other firms.
Around 125 large financial companies are required by the law to submit living wills to the Federal Reserve and the Federal Deposit Insurance Corp. by the end of 2013. Parts of the plans must be made public.
The first batch of nine banks, including Deutsche Bank AG (>> Deutsche Bank AG) and Barclays PLC (>> Barclays PLC), had to submit their road maps by Sunday, and on Tuesday the FDIC and the Fed posted snapshots of the plans on their websites.
The U.S. banks that submitted summaries were J.P. Morgan Chase (>> JPMorgan Chase & Co.), Citigroup Inc., (C), Goldman Sachs Group Inc. (>> Goldman Sachs Group, Inc.), Morgan Stanley (>> Morgan Stanley) and Bank of America Corp. (>> Bank of America Corp). Among foreign banks, UBS (UBSN.VX) and Credit Suisse (CSGN.VX) also released summaries.
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