Fischer, Stanley and Board of Governors of the Federal Reserve System (U.S.), 1935- "Comments on the Resolution Framework for Banks and Bank Holding Companies in the United States." Remarks at Panel Discussion on Resolution, Riksbank Macroprudential Conference, Stockholm, Sweden, June 22, 2016, https://fraser.stlouisfed.org/title/3778/item/536861, accessed on May 12, 2025.

Title: Comments on the Resolution Framework for Banks and Bank Holding Companies in the United States : Remarks at Panel Discussion on Resolution, Riksbank Macroprudential Conference, Stockholm, Sweden

Date: June 22, 2016
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image-container-0 For release on delivery 9:25 a.m. EDT (3:25 p.m. CET) June 22, 2016 Comments on the Resolution Framework for Banks and Bank Holding Companies in the United States Remarks by Stanley Fischer Vice Chairman Board of Governors of the Federal Reserve System at Panel Discussion on Resolution Riksbank Macroprudential Conference Stockholm, Sweden June 22, 2016
image-container-1 I’m grateful to the organizers for inviting me to participate in this conference. I would like briefly to describe the legal frameworks that exist for resolving banking organizations in the United States, the steps that the Federal Reserve and other U.S. regulators have taken to make global systemically important banking organizations (GSIBs) in the United States more resolvable, and a few of the criticisms of U.S. regulatory actions in this area, together with my responses to them. 1 U.S. law provides several legal frameworks for resolving failed financial firms. In the United States, a failed depository institution is resolved by the Federal Deposit Insurance Corporation (FDIC) using a framework created by the Federal Deposit Insurance Act. The FDIC has acted as receiver for several thousand failed banks since 1934, including 465 from 2008 through 2012. Most of these failed banks were relatively small community banks, and all were considerably smaller than the most systemically important firms active today. 2 While the Federal Deposit Insurance Act creates a special resolution framework for failed banks, a failed U.S. bank holding company--that is, a corporate entity that controls one or more banks--would generally be resolved under the same provisions of the U.S. Bankruptcy Code as would apply to other corporate debtors, such as industrial firms, in a proceeding overseen by a federal judge. During the recent crisis, fears about the systemic consequences that would follow from the bankruptcies of systemically important financial firms motivated extraordinary government actions to prevent such 1 I am grateful to Mark Van Der Weide, Barbara Bouchard and Mark Savignac of the Federal Reserve Board for their assistance in the preparation of these comments. 2 The average (per bank) assets of the 465 banks resolved by the FDIC between 2008 and 2012 was roughly $1.5 billion, with a total of $680.3 billion. The largest depository institution ever resolved by the FDIC was Washington Mutual, which was resolved in 2008 and had total assets of $307 billion prior to failure.
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Date: June 22, 2016
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