July 3, 2012
The Bloomberg BNA Daily Report for Executives article, "Largest Global Banks Submit 'Living Wills'; Practitioners, Others Debate Their Value," reported that on July 2, nine of the largest global financial institutions filed "living wills" with U.S. regulators. The process has the intention of mitigating serious, adverse effects on U.S. financial stability.
The article explains the Dodd-Frank Wall Street Reform and Consumer Protection Act requirement that banks with $50 billion or more in assets and financial companies designated as "systemically important" file resolution plans. These plans set forth how in the event of crisis, such firms would wind down their operations. The article discussed living wills, with the perspectives of government officials and leading financial institution attorneys.
The piece concluded with the perspective that living wills address the central intent of the Dodd-Frank law.
"'Informed advanced planning is critical to mitigating future financial crises. That's what Dodd-Frank was all about. The last crisis brought us to the brink of disaster, and no one wants to go that close to the edge again,' Kelley Drye & Warren LLP partner Bruce R. Kraus said."
"'The living wills are a part of a regulatory scheme that requires the government to get smarter in order to understand them. And the government is doing that,' said Kraus, who once served within the Securities and Exchange Commission's Risk, Strategy, and Financial Innovation division."