EXCLUSIVE-U.S. banks told to make plans for preventing collapse
* Regulators asked five big banks to make “recovery plans”
* Banks include BofA, JPMorgan and Goldman Sachs
* Plans outline asset, business sales in times of distress
* Plans differ from living wills, which plan for failure
By Rick Rothacker
Aug 10 (Reuters) – U.S. regulators directed five of the country’s biggest banks, including Bank of America Corp (BAC.N) and Goldman Sachs Group Inc (GS.N), 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.
Officials like Lehman Brothers former Chief Executive Dick Fuld have been criticized for having been too hesitant to take bold steps to solve their banks’ problems during the financial crisis.
According to documents obtained by Reuters, the Federal Reserve and the U.S. Office of the Comptroller of the Currency first directed five banks – which also include Citigroup Inc, (C.N), Morgan Stanley (MS.N) and JPMorgan Chase & Co (JPM.N) – to come up with these “recovery plans” in May 2010.
They told banks to consider drastic efforts to prevent failure in times of distress, including selling off businesses, finding other funding sources if regular borrowing markets shut them out, and reducing risk. The plans must be feasible to execute within three to six months, and banks were to “make no assumption of extraordinary support from the public sector,” according to the documents.
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People please share this article- warning to BANKS to Prepare for Collapse !
We need to prepare-move your $$$ to Local Banks with a Community Bank or Credit Union -NOW
Let the National Banks Collapse-they would have already collapsed without BAILOUTS and YOUR MONEY.
Ridiculous, this is the equivalent of the OCC saying “Keep a flashlight handy in case the power goes out”. Wonderful PR. Occupy!
Well, they have destroyed my life and my world. I wont feel bad if all of the crooks and people who have protected them crash and burn.