Bankruptcy & Liquidation

On June 19, 2012, the Financial Stability Board (“FSB”) issued a progress report to the G20 Leaders on the steps FSB member nations have taken to implement financial reforms designed to improve the stability of the global financial system.  The FSB reviewed, among other things, its members’ Basel implementation, adoption of resolution-planning regimes, oversight of the so-called “shadow banking system,” reform of the OTC derivatives market, and the effectiveness of the FSB itself.  The FSB concluded that its member nations have made significant progress in implementing globally agreed financial reforms, but large strides are still necessary—particularly regarding recovery and resolution planning—to protect the global economy against future financial crises.

What is the FSB?

The FSB is an [click to continue…]

On June 25, 2012, Heath Tarbert, partner and head of Weil’s Financial Regulatory Reform Working Group, and Sylvia Mayer, a partner in the Business Finance & Restructuring practice in Weil’s Houston office, were each quoted in the current issue of American Banker regarding the July 1 first round deadline for certain financial institutions to submit so-called “living wills” to resolve their affairs if the institution faced material distress or failure.  Tarbert was quoted as saying: “In many ways, this first round is probably a little bit less about potential resolution than it is about how these organizations are structured . . . [t]he goal over time will be to have the various scenarios built into the overall plan.”  Mayer added that “As no one has ever done this before, this first round of filing will effectively set the floor for this process . . . [t]he regulators have said informally that with this first round, nobody is going to fail. But after these first submissions, regulators are going to have expectations.”  The article, entitled “Banks’ Living Wills Face First Critical Test,” was written by Joe Adler and appears in the June 25th, 2012 issue of American Banker. [click to continue…]

By Sylvia Mayer and Conray Tseng

On May 22, 2012, the Financial Stability Oversight Council (“FSOC”) promulgated hearing procedures (“Procedures”) for, among others, non-bank financial companies and financial market utilities (“FMUs”) to contest the FSOC’s designation of such entities as systemically important.  In addition, the FSOC designated an initial list of FMUs.  The list of designated FMUs has not been disclosed.  Each of the FMUs will be notified of their designation and afforded an opportunity to contest it.  As a result, the Procedures were made effective immediately, but may be modified following a 60 day comment period. There is speculation that an initial list of non-bank financial companies is on the horizon, but timing is unknown.

By way of background, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the FSOC may designate certain non-bank financial companies and FMUs as systemically important, thus subjecting these entities to [click to continue…]

Weil’s Marcia L. Goldstein, Heath P. Tarbert, and Kathlene M. Burke authored a column for The New York Law Journal discussing the recently finalized implementing rule in connection with resolution plans, or “living wills,” concluding that the regulations still leave a substantial degree of uncertainty as to what exactly it will take to ensure a plan is “credible.”

Access Full-Text Article from The New York Law Journal (may require subscription)

Systemic Risk: The Age of SIFIs and GSIBs

The Clearing House’s First Annual Business Meeting & Conference

November 9-10, 2011, New York Palace Hotel, New York, NY | Register Now

Weil’s Heath Tarbert is scheduled to appear as a panelist at The Clearing House’s First Annual Business Meeting & Conference, to be held on November 9-10 at the New York Palace Hotel in New York, NY. The conference will examine the commercial banking regulatory and payments landscape in the post-Dodd-Frank era, as well as other related legal and tax issues. Mr. Tarbert’s panel will discuss current Dodd-Frank rulemakings pertaining to the Orderly Liquidation Authority, Title II, Early Remediation, and resolution planning, or “living wills.”