Week InAdvance: January 19, 2016
On Wednesday, Federal Deposit Insurance Corp. Vice Chairman Thomas Hoenig will be at the Peterson Institute of International Economics in Washington Dc to discuss existing strategies for resolving large, interconnected financial companies. The former Kansas Fed president, who was a member of the Federal Open Market Committee from 1991 to 2011, has sharply criticized how regulators dealt with the financial crisis and banks' living wills. Dodd-Frank and global capital rules don't mandate the break-up of big banks, leaving regulators with the job of winding them down safely if they collapse. Hoenig prefers the Dodd-Frank plans which require complex financial firms to be resolved in bankruptcy court. "We're not going to break you up, but we want you to structure yourself so that your failure doesn't bring the economy down next time," Hoenig said last year. "If you can't get to that point with your current organization structure, then you should sell assets to get to that state."
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