‘Living Wills’: New Guidance From The Fed For Second Time Filers

Earlier this month, the Fed identified various shortcomings in the so-called resolution plans submitted by 11 large and very complex banking organizations.

Resolution plans are documents that lay out the road map or “strategy for rapid and orderly resolution under the U.S. Bankruptcy Code in the event of material financial distress or failure of the company.” These resolution plans have been dubbed “living wills” by the financial media, and specify the steps to be taken in a crisis, including raising funds and for an orderly wind down of the organization.

Fed: Earlier shortcomings in 'living wills'

An initial lot of companies (referred as “first-wave filers” by the Fed) submitted living wills in 2012, and amended versions thereof in a second round in...