U.S. Living-Wills Rule May Stop Short on Key Issues, Person Says
By Meera Louis
U.S. regulators may release rules for handling failures of systemically important financial companies without fully addressing cross-border resolutions and protection of firms’ confidential information, according to a person with direct knowledge of the negotiations. The Financial Stability Board, an international panel that works to align financial-industry rules, has urged regulators to require that banks plan for orderly resolutions to prevent a repeat of the market tumult that followed the September 2008 bankruptcy of Lehman Brothers Holdings Inc. The U.S., which enacted Dodd-Frank in response to the 2008 crisis, won’t be able to address rules for companies operating in multiple jurisdictions until all the rules are in place, the person said. “These issues are very prickly because the U.S. rules are unique until the global framework is constructed and the degree of true harmonization and real confidentiality can be assessed,” said Karen Shaw Petrou, managing partner of Washington-based Federal Financial Analytics Inc.