A year later than initially promised, the FDIC board today released guidelines for public comment on how to make operational the single-point-of-entry (SPOE) resolution protocol seen by Chairman Gruenberg and FDIC staff as the agency’s most likely approach to SIFI resolution (see FSM Report RESOLVE15).  Although the notice was unanimously approved for release, Vice Chair Hoenig, Director Norton, and CFPB Director Cordray detailed many concerns with it.  Chairman Gruenberg offered his usual factual statement and, somewhat surprisingly, Comptroller Curry said simply that he welcomed public comment.  FDIC staff sought to reassure both the Board and the public that SPOE will be a successful resolution strategy that does not reinforce TBTF or create taxpayer risk, also providing additional details on SPOE’s mechanics.  The FRB will propose specific top-tier wholesale debt requirements during the first quarter, although the FDIC’s proposal will also seek views on how much this should be and how it should be structured.  However, Messrs. Hoenig and Norton noted major remaining concerns, including whether cross-border resolutions would be marred by ex post ring-fencing, the extent to which SIFI subsidiaries would become de facto TBTF firms, and the amount of taxpayer support the FDIC would be forced to provide to effect an SPOE resolution.  This report describes the meeting and key issues; a subsequent in-depth report will provide clients with an analysis of the FDIC’s guidelines.

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