Economy USA

US banks give regulators plans for how they’d…

Washington – On Tuesday the nine largest banks in the United States said the U.S. government how they could be dismantled and sold in a bankruptcy.

The Federal Deposit Insurance U.S. has announced details of “living wills” filed by Bank of America, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley and UBS. These documents were required under rules adopted in 2010, giving regulators the power to seize and dismantle banks that threaten the integrity of the financial system.

The government tries to prevent a repeat of what happened during the 2008 financial crisis when taxpayers had to come to the rescue of financial institutions at risk. At that time, the government had no rule allowing it to liquidate banks deemed too important to be able to tolerate their failure.

Over a hundred other banks must submit such wills by the end of next year. All banks must bring their wills updated at least once a year, or whenever changes to their financial health warrant.

Banks had to detail their assets and debts as well as the ties that bind them to other institutions. They also had to explain how it would be possible to liquidate them in a quick and orderly bankruptcy.

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