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June 24, 2015

Will Wall Street’s Living Wills Be Dead on Arrival Again This Year?

Washington, D.C. – Dennis Kelleher, President and CEO of Better Markets, issued this statement as Wall Street’s biggest banks prepare to file their so-called “living wills” next week with the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC). These resolution plans are required under the Dodd-Frank Wall Street financial reform law to ensure that the too-big-to-fail banks can be resolved in bankruptcy without any taxpayer-funded bailouts.

One year ago, federal regulators at the FDIC and the Fed shocked everyone by flunking all 11 of the largest banks in the country for failing to file plans making them resolvable in bankruptcy, proving that they still posed a major risk to taxpayers, the economy and our financial system. Demonstrating no intent to comply with the law or reduce their taxpayer backstop, these banks failed to ‘even identify’ key elements of their resolution plans, brazenly making clear that the too-big-to-fail banks continue to put their profits above the best interests of the American people.

The truth is that Wall Street’s biggest banks don’t want to be resolvable in bankruptcy if they fail like every other business in America. They want to keep their unique status as too-big-to-fail so that U.S. taxpayers will have to bail them out like what happened in 2008-2009. That way they get to keep their jobs, bonuses and bailouts, shifting the costs of their failure to taxpayers. On top of all that, the bankers at the too-big-to-fail banks get treated as being too-big-to-jail, also unlike every other person in America.

That’s why no one should have been surprised that this handful of dangerous banks and bankers wouldn’t willingly give up their ‘need’ for taxpayer bailouts. That’s why it was so important for the Fed and FDIC to reject the grossly deficient ‘living will’ resolution plans submitted a year ago and to publicly detail specifically what the banks had to do to file viable resolution plans this year. The regulators must publicly disclose the plans filed next week and must show that the plans conclusively satisfy the criteria set last year. If these banks again fail to prove they are resolvable in bankruptcy, then the regulators must use all the legal powers available to them, including requiring the banks to dispose of assets and business lines until they are resolvable in bankruptcy. The credibility of the Fed and FDIC are at stake here and they are facing as big a test, if not bigger, than the too-big-to-fail banks.”


Better Markets is an independent, nonprofit, nonpartisan organization that promotes the public interest in financial reform in the domestic and global capital and commodity markets. Better Markets advocates for transparency, oversight and accountability with the goal of a stronger, safer financial system that is less prone to crisis and failure thereby eliminating or minimizing the need for more taxpayer funded bailouts. To learn more, visit

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