Big Banks Get Failing Grade on ‘Living Wills’

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Aug. 6 (Bloomberg) -- The Federal Reserve and Federal Deposit Insurance Corp. told 11 of the largest U.S. and foreign banks, including JPMorgan and Goldman Sachs, that they botched their so-called living wills. Erik Schatzker reports on “Bloomberg Surveillance.” (Source: Bloomberg)

Prove they can survive in the event of a crisis.

Is this the same as a stress test?

No, they are totally different.

This comes down to what was required in dodd-frank.

It was so taxpayers wouldn't have to bail out wall street in the event of another financial crisis.

The only way it's going to happen is if the banks are not too big teeth -- not too big to fail.

The only way to prove it is if they have these living wills outlining how they would be wound down in a so-called disorderly -- so-called orderly fashion.

The gym give you a living carpet?

Is that -- did jim give you a carpet?

Is that in his living will?

What it is becoming is a systemically important financial institution, so he will have to confront this issue.

The problem is, the fed and the fdic will have to determine the case of these 11 bank that these living wills were not "credible." we don't see be living wills.

They are private.

We only see 35 pages.

In case of emergency, break glass.

Break glass and then what?

Read a 450 page document?

[laughter] what i love about the sec rules is that they expected the next him around to establish a less complex structure.

That is regulation at work.

They are saying, you have to change.

You have hit the nail on the head.

This is a backdoor way to force banks to be less complex.

The fdic and the fed can put a gun to the head of the banks and say, sell units, break this up, etc.

Have you seen a living will from jpmorgan echo -- jpmorgan?

I've only seen 35 pages, because that's the public part.

What does it look like echo it's not impressive.

The resolution part, "we will a you know."

This text has been automatically generated. It may not be 100% accurate.


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