Sneaky sneaky.
Biggest banks in US ordered to draw up crisis
plans
04:46
AM Aug 11, 2012
WASHINGTON - United States regulators have directed five of the
country's biggest banks to develop plans for staving off collapse if they faced
serious problems, emphasising that the lenders could not count on government
help.
The two-year-old programme, which has been largely kept secret, is
in addition to the "living wills" the banks crafted to help regulators dismantle
them if they 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.
According to documents Reuters obtained under the Freedom of
Information Act, the Federal Reserve and the US Office of the Comptroller of the
Currency directed Bank of America, Goldman Sachs, Citigroup, Morgan Stanley and
JPMorgan Chase to come up with these "recovery plans" in May 2010.
They told the 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".
Spokespeople for the five banks and the Federal Reserve declined to comment
yesterday.
Reuters