Federal Reserve Finalizes Rules to Help Unwind Big Banks

The Federal Reserve on Friday finalized a new rule that should make it easier to wind down systematically important U.S. banks by creating a safe harbor for financial contracts after a firm defaults.

The decision, unanimously approved by Fed board members, forms part of global post-crisis efforts to end ‘too big to fail’ institutions that are so large and complex they could endanger the entire financial system if they fall into bankruptcy.

The rule requires global systematically important banks (GSIBs) to amend the language in common financial contracts so they cannot be immediately canceled if the firm enters bankruptcy.

By imposing new legal protections, regulators aim to prevent a run on a GSIB’s subsidiaries that could be triggered if a large number of counterparties rush to terminate their contracts, as occurred in the case of Lehman Brothers in 2008.

The new rules would apply to eight GSIBs, including JPMorgan Chase,

admin

admin

Leave a Reply

Recent Posts

Trump Supporters: Get Your 2020 'Keep America Great' Shirts Now!

Are you a proud supporter of President Donald Trump?

If so, you’ll want to grab your 2020 re-election shirt now and be the first on your block to show your support for Trump 2020!

These shirts are going fast so click here to check for availability in your area!

-> CHECK AVAILABILITY HERE


More Popular Stuff for Trump Supporters!

MUST SEE: Full Color Trump Presidential Coin (limited!)

Hilarious Pro Trump 'You are Fake News' Tee Shirt!

[Exclusive] Get Your HUGE Trump 2020 Yard or House Flag!

<