Federal Reserve Bank of Richmond President Jeffrey Lacker said he expects the breakup plans filed last week by the largest banks will show U.S. regulators how the firms should be streamlined.
“I think that’s the way to find out if they’re too big to fail,” Lacker, 56, said today in a Bloomberg Radio interview. If the so-called living wills can’t, as required by the 2010 Dodd-Frank Act, get a bank safely and quickly into a bankruptcy process, “then those plans would tell you.”
The plans filed to the Federal Deposit Insurance Corp. and Federal Reserve by nine of the largest banks including JPMorgan Chase & Co. (JPM:US) and Bank of America Corp (BAC:US). are meant to help regulators prevent shakeups to the financial system such as in the 2008 credit crisis.
The plans’ outlines of how each bank’s legal entities are interconnected will help the institutions see “things they could clean up that would make resolution more straightforward,” the Richmond Fed leader said in an interview on “The Hays Advantage” with Kathleen Hays.
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