The following Financial Services guidance note Produced in partnership with Morrison & Foerster LLP provides comprehensive and up to date legal information covering:
The US effort to end the ‘too-big-to-fail’ phenomenon which has seen controversial government support of the largest failing banks or other financial institutions is embodied in the Dodd-Frank Wall Street Reform and Consumer Protection Act 2010.
The resolution planning requirement is codified at 12 USC. §.5365(d).
The Orderly Liquidation provisions are codified at 12 USC. §§ 5381-5394.
The Financial Stability Board is consulting on guidance for recovery and resolution planning for systemically important financial institutions (SIFIs). The guidance will assist national authorities in implementing the recovery and resolution planning requirements set out in the FSB Key Attributes of Effective Resolution Regimes for Financial Institutions (see Annex III ‘Essential elements of recovery and resolution plans’).
On 5 November 2012, the Chairman of the Financial Stability Board (FSB) reported to the G20 Finance Ministers and Central Bank Governors on progress in the financial regulatory reform programme.
For reference, the term ‘bank’ here covers all insured depository institutions and their holding companies.
The new statute contains three sets of provisions intended to prevent future situations in which government support of a large troubled institution becomes necessary.
Banks, including foreign banking organisations (FBOs) with $50bn or more in total consolidated assets, are subject to more stringent regulation in certain areas, among them capital and liquidity. For reference, the term ‘large bank’ covers these institutions.
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