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Exclusive: U.S. banks told to make plans for preventing collapse
Reuters ^ | 8/11/2012 | Rick Rothacker

Posted on 08/11/2012 8:24:02 AM PDT by EBH

U.S. regulators directed five of the country's biggest banks, including Bank of America Corp and Goldman Sachs Group Inc, to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help.

The two-year-old program, which has been largely secret until now, is in addition to the "living wills" the banks crafted to help regulators dismantle them if they actually do fail. It shows how hard regulators are working to ensure that banks have plans for worst-case scenarios and can act rationally in times of distress.

Officials like Lehman Brothers former Chief Executive Dick Fuld have been criticized for having been too hesitant to take bold steps to solve their banks' problems during the financial crisis.

According to documents obtained by Reuters, the Federal Reserve and the U.S. Office of the Comptroller of the Currency first directed five banks - which also include Citigroup Inc,, Morgan Stanley and JPMorgan Chase & Co - to come up with these "recovery plans" in May 2010.

They told banks to consider drastic efforts to prevent failure in times of distress, including selling off businesses, finding other funding sources if regular borrowing markets shut them out, and reducing risk. The plans must be feasible to execute within three to six months, and banks were to "make no assumption of extraordinary support from the public sector," according to the documents.

Spokespeople for the five banks declined to comment. The Federal Reserve also declined to comment.

(Excerpt) Read more at reuters.com ...


TOPICS: Business/Economy; Extended News; Government
KEYWORDS: banking; banks

1 posted on 08/11/2012 8:24:08 AM PDT by EBH
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To: EBH
It shows how hard regulators are working to ensure that banks have plans for worst-case scenarios and can act rationally in times of distress.

I wonder: what are the fine-print details of how the Obama administration chooses to define the phrase "act rationally in times of distress."

2 posted on 08/11/2012 8:28:12 AM PDT by Steely Tom (If the Constitution can be a living document, I guess a corporation can be a person.)
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To: EBH; mnehring; COUNTrecount; Nowhere Man; FightThePower!; C. Edmund Wright; jacob allen; ...

Nut-job Conspiracy Theory Ping!

To get onto The Nut-job Conspiracy Theory Ping List you need to threaten to report me to the Admin if I don’t add you to the list...

3 posted on 08/11/2012 8:31:38 AM PDT by null and void (Day 1299 of our ObamaVacation from reality - Heroes aren't made Frank, they're cornered...)
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To: EBH

The banks are in control.


4 posted on 08/11/2012 8:38:53 AM PDT by bmwcyle (Corollary - Electing the same person over and over and expecting a different outcome is insanity)
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To: EBH

This is not news. I heard this almost a week ago!


5 posted on 08/11/2012 8:47:21 AM PDT by RayChuang88 (FairTax: America's economic cure)
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To: EBH

In my five years working in the corporate office of a top 30 bank I spent more time sitting in conference rooms writing disaster plans that it would probably surprize many of you. Weather problems, floods, terrorist attacks, the failure of the electronic payment systems, loss of our data center, and yes, economic collapse were all discussed. In order to meet the requirement of the Basal accords, we all had to have documented plans. I probably still have the huge three ring binder in my office.

This is not “news” to anyone with knowledge of the banking business.


6 posted on 08/11/2012 8:54:23 AM PDT by Vermont Lt (I just hate our government. All of them. Republican and Democrat.)
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To: EBH

Guess what? The “banks” don’t give a crap about your money. As long as the guys at the top bail out with their millions is the only thing they worry about. Case in point—Goldman Sachs recently dropped “probe”. They got away again because they got away with it the first time. No charges, etc. Until there is REAL jail time involved, we can expect this to continue.


7 posted on 08/11/2012 8:57:45 AM PDT by freeangel ( (free speech is only good until someone else doesn't like it)
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To: EBH

I regularly go to our small local bank for notary services. I spend a little time chatting with the staff. They’re telling me that bank regulators have been meeting with the administrators over the last few weeks. The discussions have not filtered down to the staff yet, but there is an increased level of tension amongst the admin people.

I wonder if this is along the same lines.


8 posted on 08/11/2012 9:07:35 AM PDT by proparapi
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To: proparapi

They are telling them how the government is going to stop withdrawals and runs on banks. What I have been doing is to draw down to about half my cash on a regular basis and putting it in my bank. If I get a check (paychecks included), half goes to the Simmons First National Bank & Trust (Simmons Mattress Company that is) guaranteed by S&W Security Company.

If Obama is defeated, deposits can be repatriated.


9 posted on 08/11/2012 9:19:14 AM PDT by Gaffer
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To: proparapi

Ground intelligence is one of FR’s strengths. Get back to us when you hear more:)


10 posted on 08/11/2012 9:29:01 AM PDT by Cold Heart
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To: EBH
A true and honest accounting of the market value of the assets of the large banks would reveal that they, like Greece, Spain and Italy, are insolvent. In other words, they are walking Zombie banks and they, the regulators and their governments are pretending that they are alive and solvent.

Likewise, an honest accounting of the financial statements of the US Government's financial statements, with realistic accounting for the present value of liabilities for future payouts for Medicare and other entitlements would reveal the impossibility of the government ever coming close to the ability to pay them.

But, the truth is unwelcome and won't be faced until "pretend and extend" fails completely and utterly. Which WILL happen. The only unknown is how long that will take.

11 posted on 08/11/2012 11:32:32 AM PDT by JustTheTruth
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To: EBH
The plans should be capable of being executed ideally within three months, but no longer than six months

Gee, whatever could happen within 3 - 6 months? It couldn't be Hussein being issued his walking papers and him pulling the plug, huh?

12 posted on 08/11/2012 11:35:15 AM PDT by bgill
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To: JustTheTruth

PS to earlier post: In addition, the massive, many-trillions of $ in derivatives exposure that the biggest banks have, most of which are tied to interest rates and have unimaginable exposure to counter party risk in ever-more-likely black swan scenarios, have the very real potential to destroy the already Zombie banks entirely. Tick, tick, tick....


13 posted on 08/11/2012 11:39:35 AM PDT by JustTheTruth
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To: null and void

Now that’s a campaign poster that ought to be slapped on every street post around


14 posted on 08/11/2012 12:11:04 PM PDT by Nifster
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To: proparapi

Regulators come through every year or so. They are jerks. Really, I would guess there is nothing to see there. Examiners ruffle the feathers in little banks because more stuff falls on fewer shoulders. Been there done that.


15 posted on 08/11/2012 1:09:15 PM PDT by Vermont Lt (I just hate our government. All of them. Republican and Democrat.)
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To: Vermont Lt

True and you may be right. What seemed different in the explanation I got was, “the unexpected and frequency of the meetings in the last couple of weeks.

The bank was poorly planned and the glass meeting room was placed immediately off the entrance. I could see the room full of people and it wasnt the staff. They were all at their desks. I asked if the “cheeses were planning their strategies for making us rich?” “No, the regulators came unexpected and theyve been in lots of meetings. Lots of new regulations getting implemented.”


16 posted on 08/11/2012 4:01:06 PM PDT by proparapi
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To: proparapi

Unexpected frequency of meetings....
They are about to be sld.


17 posted on 08/11/2012 4:28:50 PM PDT by Vermont Lt (I just hate our government. All of them. Republican and Democrat.)
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To: proparapi

Unexpected frequency of meetings....
They are about to be sold.


18 posted on 08/11/2012 4:29:02 PM PDT by Vermont Lt (I just hate our government. All of them. Republican and Democrat.)
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To: Vermont Lt

Could be . . .


19 posted on 08/11/2012 5:51:52 PM PDT by proparapi
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To: null and void; LucyT; eeevil conservative; theothercheek; Red Steel; rmlew; ml/nj; dennisw; ...
Nut-job Conspiracy Theory Ping!

Don't know quite what you mean by that, but you don't have to be a conspiracy theorist to see quite a number parallels between the Franklin D. Roosevelt administration in the 1930s and the Obama administration today.

20 posted on 08/11/2012 5:53:50 PM PDT by justiceseeker93
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To: justiceseeker93
There is a theme in these stories. Banks told go prepare for collapse... Army told to prepare to attack Americans ...

Who's doing all the telling, and why are they telling these things?

-PJ

21 posted on 08/11/2012 7:22:14 PM PDT by Political Junkie Too ( It doesn't come naturally when you're not natural born.)
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To: bmwcyle
The banks are in control.

If they don't have your money - - and your money is safely converted to hard assets including gold, guns, ammo, and fertile land - - the banks do not control YOU.

22 posted on 08/11/2012 7:32:02 PM PDT by Lancey Howard
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To: bgill

“It couldn’t be Hussein being issued his walking papers and him pulling the plug, huh?”

October.
Surprise!!?


23 posted on 08/11/2012 7:44:43 PM PDT by combat_boots (The Lion of Judah cometh. Hallelujah. Gloria Patri, Filio et Spiritui Sancto.)
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To: Lancey Howard

They own Washington DC and many states.


24 posted on 08/12/2012 7:35:35 AM PDT by bmwcyle (Corollary - Electing the same person over and over and expecting a different outcome is insanity)
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To: justiceseeker93

Thanks for the ping!


25 posted on 08/12/2012 8:51:25 AM PDT by Alamo-Girl
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To: Cold Heart

I just read that soros has sold huge amounts of bank stocks.

420,000 shares of citigroup
701,000 shares of JP Morgan
120,000 shares of Goldman Sachs

Somethings up.


26 posted on 08/17/2012 5:52:38 AM PDT by Texas resident (November 6 - Vote Against obama)
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