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James Wigand, the FDIC’s Complexity Czar

His job is to make sure financial giants can go out of business in an orderly way

James Wigand is the head of the Federal Deposit Insurance Corp.’s grandly named Office of Complex Financial Institutions, created by the 2010 Dodd-Frank Act. He will have a $60 million annual budget and a 156-member staff to monitor the health of the country’s 22 largest banks—and dismantle them if they run into trouble. His digs come complete with a 65-inch video screen, mounted in a conference room, that can connect him to any FDIC office in the country when a crisis erupts. What he doesn’t have is the ability to unwind lenders’ international operations or public confidence that the too-big-to-fail era is over. “A segment of the market won’t believe it until the authority is used,” says Wigand, 55. “I hope we never have to use it, but we’ve been given the power. So once it’s used, the market will believe.”

Doubts about whether the government will let the largest banks go under have plagued Wigand’s office since its inception last year. Even with his new authority and resources, Wigand will need approval from the Treasury Dept. before seizing a big bank. Standard & Poor’s and Moody’s Investors Service are still basing their ratings of U.S. banks partly on the likelihood of government bailouts. “The orderly liquidation powers that Dodd-Frank Act gives to regulators will not by themselves prevent future government support of a handful of individual financial institutions,” S&P said in July after reviewing the FDIC’s new resolution powers. The company also said Bank of America and Citigroup, the No. 1 and No. 3 U.S. lenders by assets, would have ratings two levels lower if it weren’t for what S&P considers implicit government backing. Moody’s said on Sept. 21 that it “continues to see the probability of support for highly interconnected, systemically important institutions as very high.”