Federal Reserve Board proposes rule to support U.S. financial stability by enhancing the resolvability of very large and complex financial firms

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Federal Reserve Board proposes rule to support U.S. financial stability by enhancing the resolvability of very large and complex financial firms

Postby kreslik.news » Mon May 02, 2016 7:30 pm


The Federal Reserve Board on Tuesday proposed a rule to support U.S. financial stability by enhancing the resolvability of very large and complex financial firms.

The proposal would require U.S. global systemically important banking institutions (GSIBs) and the U.S. operations of foreign GSIBs to amend contracts for common financial transactions to prevent the immediate cancellation of the contracts if the firm enters bankruptcy or a resolution process. This change should reduce the risk of a run on the solvent subsidiaries of a failed GSIB caused by a large number of firms terminating their financial contracts at the same time.

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