More than half of America’s biggest banks don’t have legitimate “living will” plans in the event of a crisis, federal regulators said Wednesday. Five out of eight top banks failed a test designed to track how successfully they would wind down operations without public money in the event of a financial emergency, including Bank of America, J.P. Morgan Chase, and Wells Fargo. The emergency plans are required as part of the new Dodd-Frank financial overhaul legislation, after the federal government agreed to spend billions of dollars in bailouts to keep those same banks from pulling down the U.S. economy during the 2007-2008 financial meltdown. “Today’s action is a significant step toward achieving that goal,” FDIC Chairman Martin Gruenberg said in a statement. “The FDIC and Federal Reserve are committed to carrying out the statutory mandate that systemically important financial institutions demonstrate a clear path to an orderly failure under bankruptcy at no cost to taxpayers.”
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