WASHINGTON (PNN) - October 26, 2009 - The U.S. Treasury is to back legislation that will force large financial institutions to create "living wills" to be used in the event of their collapse.
The plan aims to avoid the knock-on effects on the wider economy of a major business failing and comes in the wake of the near-collapse of companies such as American International Group (AIG).
In a move mirroring regulations being discussed in the UK, the illegitimate Obama regime will this week back plans by the House of Representative's Financial Services committee to introduce a bill to ensure that major banks and non-bank institutions cannot become too big to fail.
The legislation will force institutions to boost reserves and make it harder for them to leverage against their own assets. It will also force large institutions with the potential systemic risk to create and possibly publish "living wills" which would set out how they could be wound down in an orderly manner.
The bill would potentially mean that were a large company to collapse, its bankruptcy would be controlled by the U.S. government rather than its creditors.
It is expected that the bill, written in consultation with officials from both the Federal Reserve and the U.S. Treasury, will be published in the next few days. Treasury Secretary Tim Geithner is then expected to endorse it on Thursday.
The plan aims to avoid the knock-on effects on the wider economy of a major business failing and comes in the wake of the near-collapse of companies such as American International Group (AIG).
In a move mirroring regulations being discussed in the UK, the illegitimate Obama regime will this week back plans by the House of Representative's Financial Services committee to introduce a bill to ensure that major banks and non-bank institutions cannot become too big to fail.
The legislation will force institutions to boost reserves and make it harder for them to leverage against their own assets. It will also force large institutions with the potential systemic risk to create and possibly publish "living wills" which would set out how they could be wound down in an orderly manner.
The bill would potentially mean that were a large company to collapse, its bankruptcy would be controlled by the U.S. government rather than its creditors.
It is expected that the bill, written in consultation with officials from both the Federal Reserve and the U.S. Treasury, will be published in the next few days. Treasury Secretary Tim Geithner is then expected to endorse it on Thursday.