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Too-big-to-fail banks' living wills are inadequate, regulators say 

August 11, 2014
E. Scott Reckard, LA Times

Six years after the financial crisis, regulators said that 11 banks deemed too big to fail still have produced no workable procedures to help regulators shut them down should they ever reach the brink of failure.

The Federal Reserve and the Federal Deposit Insurance Corp. chastised Wall Street financial institutions in rejecting the plans Tuesday.

The regulators criticized "unrealistic or inadequately supported assumptions" and the "failure to make, or even to identify, the kinds of changes in firm structure and practices that would be necessary to enhance the prospects for orderly resolution."

The requirement for these resolution plans, or living wills, as they are informally known, was a key requirement of the 2010 Dodd-Frank financial reform law. The intent was to avoid a replay of the massive taxpayer bailout of banks in the financial crisis that erupted in 2008 amid the Great Recession.

Read more: LA Times

 
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