The FDIC Rejected All 11 Largest Banks' Living Wills for Unwinding in a Financial Crisis

T he FDIC Rejected All 11 Largest Banks' Living Wills for Unwinding in a Financial Crisis. Not one of these banks showed the FDIC anything that would keep the US government from having to bail their sorry asses out.

Thomas Hoenig, Vice Chairman of the FDIC said:


  “Despite the thousands of pages of material these firms submitted, the plans provide no credible or clear path through bankruptcy that doesn't require unrealistic assumptions and direct or indirect public support.”
The first round of living wills was rejected and now the second round of all 11 Too Big To Fail banks have been rejected.

The concern is that the complexity of these banks will make it hard to get international control. For example, the US law cannot touch some offshore financial instruments like Derivatives. But the international banks don't want to be able to fail. They want to remain too big to fail.

Perhaps Koenig is playing a futile game of whack-a-mole with these banks. We will see going forward.












http://finance.yahoo.com/news/ensure-big-banks-don-t-094500480.html

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