New Bank Rules Approved By FDIC: Large Banks Must Submit Annual Emergency Plans

WASHINGTON — The largest U.S. banks will be required to show regulators how they would break up and sell off their assets if they are in danger of failing.

The Federal Deposit Insurance Corp. voted 3-0 to approve the rules, which were mandated under the financial overhaul passed by Congress last year. They are designed to reduce the chances of another government bailout of Wall Street banks in the event of another financial crisis.

Among the banks affected are Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co.

The rules require banks with $50 billion or more in assets to submit plans to the FDIC, the Federal Reserve and the Financial Stability Oversight Council and send revised plans annually.

Comments

[sueinmn]

04:13 PM on 09/14/2011

The last congress passed these requirements while the present congress fights all control over regulations. This oresent congress is more than willing to let the banksters get away with stealing what is left in this country and still wanting to make austerity against the shrinking middle class and poor be the sole bail outs of future criminal acts brought on by this group of banksters.

How can anyone support this type of criminal activity or should we call it theft of america and still vote republican?

[clearasmud]

12:30 PM on 09/14/2011

But what about Jamie Dimon saying this is anti-AMerican? I mean he is one of our Corporate Masters is he not? I gues he knows there are loopholes to get around it provided by the Repugs after modifying the Dodd Frank Bill.

[CB5]

03:02 PM on 09/14/2011

All the top banks are ruthless. But we know that. But how ruthless can they really be? Most times we don't see much on the news because the powers to be hide alot (how they do it?) from the public. I found this http://www.courthousenews.com/2011/09/08/39631.htm about activities unknown to many. These bankers have grown up in banking and been a part of a lot of other big banks before their present locations in the last 20+ years. So yes, I agree they do know this kind of back door dealing. So check it out. Just my 2cents on our banking.

[Ghoaster]

11:58 PM on 09/13/2011

The FDIC is crooked....let's tell them Sept 17th on Wallstreet

[Coyote1177]

09:15 PM on 09/13/2011

Good for the FDIC. Finally some agencies wiht guts enough to stand up to the bullies and crooks.

[Irvin Spencer]

06:04 PM on 09/13/2011

Great start

[Main Street Blues]

05:17 PM on 09/13/2011

Whew....good thing the "Big Boys" diversified and got into buying up distressed properties.

[Brian Novotny]

01:20 PM on 09/13/2011

Oh no, the crime of it, darn government in everything we do, more regulations, that will cost us thousands of jobs. Ooops, if business were responsible in the first place and would not pursue profits at all costs and risks, then maybe we wouldn't need these. Problem lies that we foot the bill because of FDIC insurance when banks fail, and the result would be harmful if there were no FDIC insurance covering it. Very harmful. Think of it this way, do insurance companies pay for your home if you negligently abuse it, like start a campfire in the living room? No! Why should the FDIC not require banks to take responsible actions to protect their assets and have contingency plans in place in case of catastrophic failure or event?

[cassie reinara]

01:17 PM on 09/13/2011

I am sure these plans will be as useful as the oil industry plans in battling oil spills. Just another copy and paste job with change the company name and logo as it applies and dead people serving as emergency contacts or references.

[eugik]

01:03 PM on 09/13/2011

This is weird. A company has to submit an annual plan of dealing with a crisis. That idea only confirms the state of such company as TBTF. What should be done is changing the system, so the bankruptcy of a commercial bank would not cause a ripple effect.

I think this regulation is not needed.

[cassie reinara]

01:20 PM on 09/13/2011

Break up the banks into smaller more competitive financial companies removing conflicting interests within the operations. Systemic risk to the US and world financial system when these mega banks are no more and a country can let one of their banks go into bankruptcy without bringing the whole system down.

[eugik]

04:00 PM on 09/13/2011

Exactly. Instead of putting this useless regulation, break them up, like they did in Sweden.

[Coyote1177]

09:16 PM on 09/13/2011

That would work. That is what we had for a long time before Republicans came into power.

[ema123]

02:12 PM on 09/13/2011

This regulation does just that, it force them to plan an alternative to being bailed out. if they have no plan they will be broken up.

[eugik]

04:02 PM on 09/13/2011

And if they do have a plan, they need to be broken up anyway. But I understand what you are saying.

[Godfearing]

12:40 PM on 09/13/2011

Doesn't ENRON type Creative Cloud Computer Accounting make this regulation worthless?

[vinyl1]

12:36 PM on 09/13/2011

I don't see what use these plans would be in a rapidly-changing environment.

For example, on March 1 Bank X agrees to pay Bank Y $100MM if Bank Z fails and Bank Y loses the $100MM they loaned to them Bank Z. There is a dependency that would have to be unwound in the even of the failure of Bank X.

Then, 6 months later, the swap expires without Bank Z failing, and bank X happily pockets the $300K premium as found money.

Since Bank X filed their plan on Jan 1, this dependency was never included, and will not be included in the next annual filing.

[ema123]

02:18 PM on 09/13/2011

No, it doesnt commit the banks to have to buy another specific bank. you have assets a,b,c you have to sell assets b if you get into trouble, but of the combine assets a,b,c, the value of your debt cant cant the value of a or b or c. Your describing interbanks loans, you cant lend more than the value of any one of your assets.

[jwilson1]

12:06 PM on 09/13/2011

Thank you FDIC. I am sorry that the banks of this country gave up their integrity for short term profits and illegal gains. If we look at history it is always the same a few greedy people taking advantage of the system this time it was a whole industry!
You reap what you sow!
I hope we can someday look back at this lack of government regulation and miss deeds and say we survived!

[chefmudshark]

12:05 PM on 09/13/2011

Want to end this greed? Go to October2011.org and see you on the 6th in D.C.

[frank day]

11:29 AM on 09/13/2011

Plan Summary

" In the event we start to fail, We will cash in our political chips

and the American People will Bail us out."

[cassie reinara]

01:22 PM on 09/13/2011

At the rate things are going, you are probably referring to potato chips because they will be worth more than our currency or political system for that matter.

[SitandStay]

01:51 AM on 10/12/2011

They will just leave with the balance of what is left....meaning whatever phony figures they input.
btw, for insomnia, try magnesium slow release and vitamin D. It helps to enable you to stay asleep, a more restful sleep. I only take the prescriptive stuff when I have to and then only a half dose.