FDIC Forms Advisory Committee On Systemic Resolution Issues
WASHINGTON-The FDIC has formed an advisory committee on systemic resolutions to provide advice and guidance on how to unwind a systemically important institution.
According to American Banker, an affiliate of Credit Union Journal, the panel includes some prominent names in the financial services industry, including Paul Volcker, the former chairman of the Federal Reserve Board, Don Kohn, a former vice chairman of the central bank, and William Donaldson, the former chairman of the Securities and Exchange Commission.
Other high profile panelists include H. Rodgin Cohen, a partner at Sullivan & Cromwell and one of the industry's top consultants, John S. Reed, the former chairman and CEO of Citigroup, and Gary Stern, the former president of the Minneapolis Fed.
The list also further includes an impressive group of top academics: Anat Admati, an economics professor at Stanford University, Simon Johnson, an economics professor at MIT Sloan School of Management, and Raghuram Rajan, a finance professor at the University of Chicago.
In creating the panel, FDIC Chairman Sheila Bair said the advisory board would advise the federal regulatory agency on the effects of the failure of a systemically important institution and the tools available to successfully unwind a mega-firm, American Banker reported.
"Congress has given the FDIC a tremendous amount of responsibility to ensure that financial organizations formerly deemed too big to fail will no longer receive taxpayer funded bailouts," Bair said in a press release. "The Advisory Committee we created brings together some of the best and brightest minds to augment the groundwork that the FDIC has already put in to place to handle an extremely large and complex failure. I am very pleased with the caliber of people who have agreed to serve on this important committee."
The panel is scheduled to hold its first meeting on June 21.
James Wigand, the director of the FDIC's Office of Complex Financial Institutions, will be the agency's designated officer for the panel, which will not have formal decision-making powers.
The committee has a two-year charter and is expected to meet at least twice a year. There is currently no sunset provision for the advisory board.