The Federal Deposit Insurance Corp. board of directors Wednesday will address the internal resolution plans firms will submit to assist a hypothetical wind-down, and the creditor-claims process for seized financial behemoths.
At Sheila Bair's last board meeting as FDIC chairman, the agency is expected to revisit a rule it proposed jointly in March with the Federal Reserve Board on standards for so-called living wills.
The resolution plans, required by the Dodd-Frank Act, would map out the structure of a systemically important company, and how it would be resolved in bankruptcy.
The plans are meant to limit the impact if a company one day failed, as well as to be a resource for the FDIC if the agency someday had to seize it. Dodd-Frank gave the FDIC resolution powers for firms deemed too systemic to be wound down through bankruptcy. Under the March proposal, if regulators find a living will is subpar, they can force structural changes at a firm to make it more resolvable.
The board is also expected to discuss its March proposal on the priority of claims in a resolution authorized by the new law.
Under the proposal, the payment of unsecured creditors would be similar to the order in traditional bank receiverships, with certain differences meant to make the resolution process for systemically risky firms similar to that of bankruptcy.
