Sunday, July 10, 2011

FDIC: 'Living Wills' For Financial Firms May Be Required

The largest U.S. financial firms could be required by early next year to provide regulators a road map for how they can be wound down in the event of another financial crisis, the chairman of the Federal Deposit Insurance Corp. said Thursday.

The FDIC is scheduled next week to consider a final rule requiring the firms to submit to resolution plans, also known as "living wills," with regular updates, to regulators. The resolution plans are intended to give regulators a plan to follow if one of the nation's most-complex financial firms runs into trouble.

"I'm pushing to get something done before I leave," the agency's chairman, Sheila Bair, told reporters after a Senate Banking Committee hearing. Bair steps down from the agency on July 8, at the end of her five-year term.

A draft rule approved in March would give firms 180 days to submit their first plan after the rule is formally adopted by regulators. However, the timing of when those plans will need to be filed is still under discussion, Bair said. (read more)