Dodd-Frank, Title II: Where the FDIC and the “Orderly Liquidation Authority” Meet the Bankruptcy Code

more+
less-

The FDIC is currently responding to one of the worst financial crises in the history of the nation’s banking system. Sheila Bair, Chairman of the FDIC, expects that 2010 “will be the high water mark for the banking crisis.”1 Just over the last two years, 268 banks have failed in the United States, which is nearly ten times the number of failed banks during the prior eight-year period.2

Against this backdrop, the FDIC hoped to find “a credible resolution mechanism that provide[d] the authority to liquidate large and complex financial institutions in an orderly way.”3 The government needed the power to address companies considered “too big to fail.” Otherwise, markets would rely on future government bailouts.4 Equally critical, according to Chairman Bair, was the enforcement of market discipline by making clear that shareholders and creditors bear their respective risks.5

The result, signed into law by President Obama on July 21, 2010, is Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”).

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Topics:  Dodd-Frank, FDIC, Federal Deposit Insurance Act, Orderly Liquidation Authority, Receivership

Published In: Administrative Agency Updates, Bankruptcy Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

CONNECT

Morrison & Foerster is an international firm with more than 1,000 lawyers across 15 offices in the... View Profile »


Follow Morrison & Foerster LLP:

Reporters on Deadline