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
Top 5 Causes Leading to Construction Defect Litigation
The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]
Author: Paul Grossman
How to Protect Your New Jersey Business When Going through a Divorce
The most effective ways to protect your business in a divorce are put in place before one begins: a prenuptial or postnuptial agreement, clean separation of business and personal finances, and divorce contingencies built into your operating or buy-sell agreements. If divorce is already underway, the priorities shift to establishing how the business is classified […]
Author: Jay McDaniel
10 Common Issues in Franchise Disputes
The most common franchise disputes involve breach of contract, franchise termination and non-renewal, intellectual property rights, territorial encroachment, royalty and fee payments, franchisor support obligations, and violations of state franchise laws such as the New Jersey Franchise Practices Act. Franchisors and franchisees can often resolve these conflicts by providing written notice detailing the dispute and […]
Author: Paul Grossman
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together
New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
Author: Sean M. Pena
Eviction Is Not Always the End: Understanding Post-Possession Rent Claims in New Jersey and New York
No. An eviction does not automatically end a tenant’s obligation to pay rent. Post-eviction rent claims are common because recovering possession resolves who has the right to occupy the premises, but it does not extinguish the tenant’s contractual obligations under the lease. Whether unpaid or future rent remains owed depends on three factors: the lease’s […]
Author: Donald M. Pepe
Company Dissolved? Legal and Financial Consequences to Expect
A company is dissolved; legally, it ceases to exist. Accordingly, dissolution results in significant legal and financial consequences. It is a process that must be properly managed to avoid continuing liability. The Corporate Dissolution Process Corporate dissolution is the legal process of formally closing a corporation, paying its debts and distributing the remaining assets. Most […]
Author: Jay McDaniel
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.