Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comKey Contacts
Back
U.S. regulators said on Aug. 5 that 11 that big banks in the U.S. still do not have viable plans for filing for protection under the bankruptcy law that would avoid causing widespread economic damage.
Both the FDIC and the Federal Reserve have said that the bankruptcy plans submitted by the 11 largest banks rely on “unrealistic or inadequately supported” assumptions, Time magazine reported. The regulatory bodies assert that big banks’ plans do not outline changes in firm structure that would allow the U.S. to avoid broader economic repercussions.
The 2010 Dodd-Frank Wall Street Reform Act requires big banks to submit an annual “living will” that would allow for bankruptcy proceedings that don’t necessitate billions of dollars in taxpayer money. This law was enacted in the shadow of the 2007-08 financial crisis, which necessitated exactly that.
“Too big to fail is alive and well,” Sen. Sherrod Brown, D-Ohio, said in a statement, according to The Wall Street Journal. “The FDIC’s statement that these living wills are not credible means that megabanks will live on taxpayer life support in the event of a crash.” Brown has proposed legislation that would dramatically increase the capital requirements on the largest banks.
The findings applied to the 11 banks with U.S. assets greater than $250 billion, the news source explained. These included Bank of America Corp, Bank of New York Mellon Corp., Citigroup Inc., Goldman Sachs Group Inc., J.P. Morgan Chase & Co., Morgan Stanley, State Street Corp., Credit Suisse Group AG, Deutsche Bank AG, UBS AG and the U.S. units of Barclays PLC.
Representatives of these big banks declined to give the Journal a statement or had no immediate comment at press time. The Financial Services Forum told the news source that banks are safer now than they were pre-crisis, and that “the industry remains strongly committed to ensuring the financial system is less complex, safe, transparent, accountable and capable of fulfilling its role of promoting economic growth and weathering substantial stress scenarios without taxpayer dollars being at risk.”
As a bankruptcy attorney, I’ve always followed the day-to-day of larger banks. Check out some of my previous posts on the subject:
- Bank of America Says Countrywide Bankruptcy Remains an Option
- Banks Unveil Bankruptcy Plans in Living Wills
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
New York NDA Requirements for Businesses
Non-disclosure agreements (NDAs) remain a critical tool for protecting sensitive business information. However, New York NDA requirements have evolved, and businesses must ensure these agreements are carefully drafted to remain enforceable. In a competitive market like New York City, NDAs are commonly used to protect proprietary information, client relationships, and strategic plans. At the same […]
Author: Dan Brecher
New Jersey Will Contest Grounds Explained
How Courts Evaluate Testamentary Capacity and Undue Influence Will contests in New Jersey are difficult to win, given the strong presumption that a properly executed will reflects the testator’s intent. However, challenges based on lack of testamentary capacity and undue influence remain common, particularly where there are concerns about mental capacity or the involvement of […]
Author: Marc J. Comer
Legal Issues Before Bringing on Investors
Bringing on outside investors can provide the capital and strategic support a business needs to grow. However, raising capital also introduces important legal, financial, and operational considerations. Before bringing on investors, businesses should address key legal issues to reduce risk, streamline investor due diligence, and position the company for long-term success. Early preparation signals that […]
Author: Dan Brecher
SECURE 2.0 RMD Planning Strategies
How the Updated Law Shapes Retirement and Estate Planning The SECURE 2.0 Act of 2022 materially reshapes the required minimum distribution (RMD) landscape, extending tax deferral opportunities while accelerating distribution requirements for many beneficiaries. For high-net-worth individuals and families, these changes are not merely technical. They require a reassessment of retirement income strategies, beneficiary planning, […]
Author: Marc J. Comer
Buying Commercial Property in New Jersey: Legal Guide for Small Businesses
Small businesses considering buying commercial property in New Jersey must evaluate a range of legal, financial, and operational factors. While ownership can offer long-term value and control, it also introduces significant risks if not properly structured. This guide outlines key considerations to help New Jersey business owners make informed decisions, minimize legal exposure, and successfully […]
Author: Robert L. Baker, Jr.
The SEC’s Latest Guidance on Applying Federal Securities Laws to Tokenized Securities
On January 28, 2026, staff of the U.S. Securities and Exchange Commission’s Divisions of Corporation Finance, Investment Management, and Trading and Markets issued a joint statement clarifying how existing federal securities laws apply to tokenized securities. The SEC’s “Statement on Tokenized Securities” does not establish new law, but it does provide greater clarity on the […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.