Banks are Told to Plan for CollapseQuicklink submitted by Josh Mitteldorf Permalink
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|(Reuters) - U.S. regulators directed five of the country's biggest banks, including B of A and Goldman Sachs, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help. The two-year-old program, which has been largely secret until now, is in addition to the 'living wills' the banks crafted to help regulators dismantle them if they actually do fail. It shows how hard regulators are working to ensure that banks have plans for worst-case scenarios and can act rationally in times of distress. 5 years after the financial crisis, concerns remain about whether blow-ups at big banks could lead to another round of taxpayer bailouts. Trading losses have cost JPMorgan nearly $6 billion so far, and scandals such as the alleged rigging of LIBOR rate benchmark have only highlighted the risks lurking inside big banks.|
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