1. Too Big to Fail

    Banks Crafting ‘Living Wills’

    A man looks out the window from the  JP Morgan Chase World Headquarters on Park Avenue  May 15, 2012 in New York.  The US Justice Department has opened an investigation into JPMorgan Chase's more than $2 billion trading loss that the Wall Street bank announced last week, media reports said Tuesday.       AFP PHOTO  TIMOTHY A. CLARY        (Photo credit should read TIMOTHY A. CLARY/AFP/GettyImages)

    Timothy A. Clark, AFP / Getty Images

    Five of the nation’s largest banks are writing contingency plans to be used if they go under. The plans are one of the requirements of the Dodd-Frank financial-reform law. The “living wills,” which may be up to 4,000 pages long, must be submitted to regulators by July 1. JP Morgan Chase, Bank of America, Citigroup, Goldman Sachs, and Morgan Stanley will all submit their plans to the Federal Reserve and the FDIC. Even the healthiest banks are submitting plans and simplifying their global operations, because the Dodd-Frank law allows regulators to compel a bank to divest subsidiaries if it cannot plan for an orderly resolution in bankruptcy. One expert said, “The resolution process is now going to be part of the cost-benefit analysis on where banks will do business. The complexity of the organizations will shrink.”

    Read it at Reuters