FDIC holds first Systemic Resolution Advisory Committee meeting

The Federal Deposit Insurance Corporation hosted its first meeting of the Systemic Resolution Advisory Committee on Tuesday.

The newly created panel was designed to provide advice and recommendations on a broad range of issues relevant to the failure and resolution of a systemically important financial company.

The agenda for the committee’s first meeting included an overview of the new U.S. systemic resolution framework under the Dodd-Frank consumer protection plan, as well as Wall Street reform law and its role for derivatives and qualified financial contracts and cross-border resolution issues.

The 19 committee members heard several presentations on how the bankruptcy of Lehman Brothers would have been handled under the new framework.

During her opening statement, FDIC Chairman Sheila Bair said measures at the core of the Dodd-Frank Act create a new resolution framework that will apply to non-bank institutions and entities deemed so large, complex and interconnected, that the prospect of their fate could threaten overall financial stability.

“FDIC staff is working to implement the statutory mandate under the Dodd-Frank Act, which includes among its many provisions a requirement for detailed, analytical resolution plans and the authority for the FDIC to resolve a systemically important financial company,” Bair said. “It is important that implementation of these provisions incorporate the key lessons from the crisis.”

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