Chapter
Minimize Spillover Effects
Resolving a Large, Interconnected Failing Firm
APPENDIX. SELECTED HISTORICAL EXPERIENCE WITH “TOO BIG TO FAIL”
Resolution of Banks Before and After the Federal Deposit Insurance Corporation Improvement Act
Long-Term Capital Management
Ban on Naked Short Selling in July 2008
Fannie Mae and Freddie Mac
Washington Mutual and Wachovia
TARP, Citigroup, Bank of America, and the Stress Tests
Chapter 2 STUDY AND RECOMMENDATIONS REGARDING CONCENTRATION LIMITS ON LARGE FINANCIAL COMPANIES
Summary of Conclusions and Recommendations
PART A: SUMMARY OF SECTION 622, AS ENACTED
2. Scope of Financial Companies Subject to the Concentration Limit
3. Calculation of a Financial Company’s Liabilities
4. Statutory Exceptions and Interpretations
PART B: EFFECTS OF THE CONCENTRATION LIMIT
1. Overall Effects of the Concentration Limit
2. Effects of the Concentration Limit on Future Financial Stability
3. Effects of the Concentration Limit on Moral Hazard
4. Effects of the Concentration Limit on the Efficiency and Competitiveness of US Financial Firms and Markets
5. Effects of the Concentration Limit on the Cost and Availability of Credit and Other Financial Services
PART C: RECOMMENDATIONS REGARDING MODIFICATIONS TO THE CONCENTRATION LIMIT
2. Recommended Modifications to the Concentration Limit
2.1. Definition of “Liabilities” for Certain Companies
2.2.Collection, Aggregation and Public Dissemination of Concentration Limit Data
2.3. Acquisition of Failing Insured Depository Institutions
Chapter 3 PRELIMINARY STAFF REPORT: GOVERNMENTAL RESCUES OF “TOO-BIG-TO-FAIL” FINANCIAL INSTITUTIONS*
II. BANK RESCUES BEFORE FDICIA
III. THE IMPACT OF FDICIA ON BANK RESCUES
IV. BEFORE THE FINANCIAL CRISIS, MANY MARKET PARTICIPANTS VIEWED FANNIE AND FREDDIE AS PRESUMPTIVELY TBTF
V. BEFORE THE FINANCIAL CRISIS, FEDERAL REGULATORS ENCOURAGED BANKS TO SUPPORT IMPORTANT INSTITUTIONS IN THE CAPITAL MARKETS
VI. FEDERAL REGULATORS USED EXTRAORDINARY MEASURES TO PROTECT TBTF INSTITUTIONS DURING THE FINANCIAL CRISIS
A. The Rescue of Bear Stearns and the Primary Dealer Credit Facility
B. The Conservatorships of Fannie and Freddie
C. The Failure of Lehman Brothers and the Rescue of AIG
D. The Failure of Washington Mutual and the Rescue of Wachovia
E. TARP and Other Assistance for Banks
F. The Impact of the Stress Tests on the 19 Largest Banks
Chapter 4 REGULATING SYSTEMICALLY IMPORTANT FINANCIAL FIRMS (REMARKS BY DANIEL K. TARULLO, BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM)*
RATIONALE FOR ENHANCED CAPITAL REQUIREMENTS
FEATURES OF THE ENHANCED CAPITAL REQUIREMENT
CALIBRATING THE ENHANCED CAPITAL STANDARDS
OBJECTIONS TO ENHANCED CAPITAL STANDARDS
Chapter 5 REGULATING SYSTEMIC RISK (REMARKS BY DANIEL K. TARULLO, BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM)*
DISTRESSED FIRMS AND SYSTEMIC RISK
IMPLICATIONS FOR REGULATORY POLICY
IMPLEMENTING THE SPECIAL SUPERVISORY AND PRUDENTIAL REQUIREMENTS
Chapter 6 “WE MUST RESOLVE TO END TOO BIG TO FAIL”*
BALANCING THE GOVERNMENT’S ROLE
COMPETITIVE IMPLICATIONS OF TOO BIG TO FAIL
THE NEW SIFI RESOLUTION FRAMEWORK
DOUBTS AND MISCONCEPTIONS ABOUT THE NEW RESOLUTION FRAMEWORK
RESOLUTION PLANS MUST BE CREDIBLE AND ACTIONABLE
WHAT YOU CAN DO TO SHAPE THE OUTCOME
"Too Big to Fail" or Systemically Important Financial Institutions
( Financial Institutions and Services )
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