{"id":12028,"date":"2012-08-14T10:13:50","date_gmt":"2012-08-14T17:13:50","guid":{"rendered":"http:\/\/www.itmtrading.com\/?p=12028"},"modified":"2013-03-05T14:53:09","modified_gmt":"2013-03-05T21:53:09","slug":"u-s-banks-to-consider-drastic-measures-in-drastic-times","status":"publish","type":"post","link":"https:\/\/www.itmtrading.com\/blog\/u-s-banks-to-consider-drastic-measures-in-drastic-times\/","title":{"rendered":"U.S. Banks To Consider Drastic Measures in Drastic Times"},"content":{"rendered":"

\"\"<\/a>In a two-year “Drastic Times<\/strong>” program that has mostly been secret until now, U.S. regulators have ordered five of the nation\u00e2\u20ac\u2122s largest banks, Bank of America, Goldman Sachs, Citigroup, Morgan Stanley, and JP Morgan, to develop emergency plans to avoid a collapse, specifically without the help of a bailout<\/a> or other aid from the government.<\/p>\n

Back in May of 2010, the Federal Reserve<\/a> and the U.S. Office of the Comptroller of the Currency ordered these five banks to develop of these \u00e2\u20ac\u0153recovery plans\u00e2\u20ac\u009d to examine severe measures that would side-step collapse<\/a> in desperate times. These measures take in selling off assets, developing other income sources, and minimizing risk.<\/p>\n

This counsel is interesting as the same advice could well be given to individuals and families across the country. In the face of increasing desperate times we should look to develop our own \u00e2\u20ac\u0153recovery plan\u00e2\u20ac\u009d in cutting back on luxuries and selling off unnecessary items, developing alternative sources of income, and minimizing our own risk.<\/p>\n

At the time the recovery plans were ordered in 2010 they garnered little public attention. The specific banks that were required to submit them have not been disclosed before Reuters acquired them as a result of a petition of the Freedom of Information Act.<\/p>\n

These \u00e2\u20ac\u0153recovery plans\u00e2\u20ac\u009d should not be confused with the \u00e2\u20ac\u0153living wills\u00e2\u20ac\u009d from the recent past, which are also called \u00e2\u20ac\u0153resolution plans.\u00e2\u20ac\u009d The objective of the \u00e2\u20ac\u0153living wills\u00e2\u20ac\u009d is to detail how they would sell parts of themselves off in the advent of a disaster and at the same time not endanger the financial system.<\/p>\n

\u00e2\u20ac\u0153Recovery plans are about protecting the crown jewels,\u00e2\u20ac\u009d remarked Paul Cantwell, a managing director at consulting firm Alvarez & Marsal. \u00e2\u20ac\u0153It\u00e2\u20ac\u2122s about, \u00e2\u20ac\u02dcHow do I sell off non-core assets?\u00e2\u20ac\u2122 The priority is to the shareholders. A resolution plan is about protecting the system, taxpayers and creditors.\u00e2\u20ac\u009d<\/p>\n

One of the senior deputy comptrollers for large banks at the OCC, Mike Brosnan, said the office constantly examines back-up plans at the banks and savings associations it oversees.<\/p>\n

\u00e2\u20ac\u0153Recovery plans required of the largest banks are helpful in ensuring banks and regulators are prepared to manage periods of severe financial distress or instability affecting the banking sector,\u00e2\u20ac\u009d he stated.<\/p>\n

Each plan was to deal with dangerous financial pressure at the bank, as well as \u00e2\u20ac\u0153general financial instability.\u00e2\u20ac\u009d The directions for the plans were to be executable preferably between three and six month period, according to the documents to deal with drastic times.<\/p>\n","protected":false},"excerpt":{"rendered":"

In a two-year “Drastic Times” program that has mostly been secret until now, U.S. regulators have ordered five of the nation\u00e2\u20ac\u2122s […]<\/p>\n","protected":false},"author":8,"featured_media":12030,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1207],"tags":[27,53,1244,1245],"class_list":["post-12028","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-american-economy","tag-federal-reserve","tag-recovery-plans","tag-financial-distress"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/12028","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/comments?post=12028"}],"version-history":[{"count":4,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/12028\/revisions"}],"predecessor-version":[{"id":13411,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/posts\/12028\/revisions\/13411"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media\/12030"}],"wp:attachment":[{"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/media?parent=12028"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/categories?post=12028"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.itmtrading.com\/blog\/wp-json\/wp\/v2\/tags?post=12028"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}