The FRB and FDIC have revised the protocols the eleven largest BHCs must follow as they file their 2013 living wills, doing so in part because critics increasingly charge that the resolution plans required by Dodd-Frank do not have their desired effect in curtailing too-big-to-fail (TBTF) banking. Revised living wills will now need to answer some difficult questions, for example with regard to how cross-border stress and exposures to financial-market utilities (FMUs) will be handled. The goal of the revised protocols is to make bankruptcy resolution a more practical option than likely under the prior approach, although the ability of big banks to plan for actions not yet well specified by policy-makers could put covered firms under particular pressure, especially if the FRB and FDIC this time around decide to make use of their power to force restructuring at any BHC whose plan is not found credible. Reflecting the focus on bankruptcy resolution, an array of new requirements now will require detailed planning for Chapter 11 resolution, including final decisions by the board of directors on factors that would put the firm into voluntary bankruptcy and how this would be accomplished over thirty days without resulting systemic risk.

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