FDIC Approves Proposal for Large Banks to Write ‘Funeral Plans’ for Largest Banks

The Federal Deposit Insurance Corp. board approved a proposed rule that would require about 40 U.S. financial institutions to submit annual contingent resolution plans — “funeral plans” — that would demonstrate how to wind down the company in the event of its failure.

FDIC board members voted unanimously to release the proposal for public comment during a meeting in Washington today. The proposed rule would apply to depository institutions with more than $10 billion in assets that are part of a bank holding company with assets of more than $100 billion.

Senators Mark Warner, a Virginia Democrat, and Bob Corker, a Tennessee Republican, have pushed for a similar proposal for all large financial institutions in the financial-overhaul bill now on the Senate floor.

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