Goldman Sachs chief executive Lloyd Blankfein backed Federal Deposit Insurance Corp. efforts, mandated under the Dodd-Frank Act, to create a rule for orderly closures of big firms.
"There would be an orderly liquidation, emphasis on orderly," Blankfein said when asked what he thought regulators would do if his bank were on the brink of failure.
"The FDIC, echoing ideas discussed in other countries, has embraced a resolution model of creating a bridge entity to hold the subsidiary of a failed parent, with some creditors having the option of converting debt into equity," writes American Banker's Victoria Finkle.
"Anybody who thinks there is political will to rescue failing financial institutions are not reading the same papers I'm reading, and certainly aren't getting the same stimulus that I'm getting on the regulatory side or my connection with the political body," he added.
For the full piece see "Feds Are Prepared to Let Dying Banks Fail, Goldman's Blankfein Says" (may require subscription).