Big Banks Must Show Break-Up Plans

By: Associated Press
By: Associated Press

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Tuesday, January 17, 2012

The largest banks must show how they would break up their assets if they were in danger of failing, under a rule approved Tuesday.

The Federal Deposit Insurance Corp. voted to require banks with $50 billion or more in assets to submit so-called living wills. Banks with more than $250 billion in assets would have to show their plans by July. The rest of the 37 banks affected by the rule would have until 2013.

The FDIC also proposed that banks with more than $10 billion in assets conduct annual stress tests to show how they would handle
worsening economic conditions. Stress tests subject banks' balance
sheets to scenarios such as increasing unemployment and falling
home prices.

Both rules were required by the 2010 financial overhaul.

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