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Wednesday, July 4, 2012

English - The Five Big Banks Draft Plans for Going Out of Business





The Five Big Banks Draft Plans for Going Out of Business 





Thanks to Janis 


Stephen: JP Morgan Chase and Co, Bank of America, Citigroup, Goldman Sachs and Morgan Stanley are among those submitting first liquidation scenarios at the Federal Reserve and the Federal Deposit Insurance Group, according to this story from Reuters. They MUST do so by July 1! 


My take on this is that they want to cover their butts, believing they might get some money back when they come a-cropper. I also notice they are filing these “living wills” with the Federal Reserve, which is also soon to be exposed for what it is. So we have a scenario where the cabal’s big banks are turning to another cabal institution for help… obviously hoping that some decades-old (il)legal loophole will be able to save them.


What is most re-assuring, though, is to see that this news has been written by and is being widely circulated via a major worldwide mainstream news wire service – even if the headline says “in case”, when we all know they “have” to be put out of doing business in the way they have been up until now.


Big Banks Craft “Living Wills” in Case They Fail 


By David Henry and Dave Clarke, Reuters – June 27 2012


http://finance.yahoo.com/news/big-banks-craft-living-wills-075041248.html


NEW YORK/WASHINGTON (Reuters) – Five of the biggest banks in the United States are putting finishing touches on plans for going out of business as part of government-mandated contingency planning that could push them to untangle their complex operations. 


The plans, known as living wills, are due to regulators no later than July 1 under provisions of the Dodd-Frank financial reform law designed to end too-big-to-fail bailouts by the government. The living wills could be as long as 4,000 pages. 


Since the law allows regulators to go so far as to order a bank to divest subsidiaries if it cannot plan an orderly resolution in bankruptcy, the deadline is pushing even healthy institutions to start a multi-year process to untangle their complex global operations, according to industry consultants. 


“The resolution process is now going to be part of the cost-benefit analysis on where banks will do business,” said Dan Ryan, leader of the financial services regulatory practice at PricewaterhouseCoopers in New York. “The complexity of the organizations will shrink.” 


JPMorgan Chase & Co (JPM), Bank of America Corp (BAC), Citigroup Inc (NYS:C), Goldman Sachs & Co (GS) and Morgan Stanley (MS) are among those submitting the first liquidation scenarios to regulators at the Federal Reserve and the Federal Deposit Insurance Corp, according to people familiar with the matter. 


The five firms, which declined to discuss their plans for this story, have some of the biggest balance sheets, trading desks and derivatives portfolios of financial institutions in the United States. 


Great Britain and other major countries are imposing similar requirements for “resolution” plans on their big banks, too. 


The liquidation plans are coming amid renewed questions about the safety of big banks following JPMorgan’s stunning announcement last month that a trading debacle has cost it more than $2 billion – a sum far too small to endanger the bank, but shocking enough to bring back memories of the financial crisis.


A Nod to Glass-Steagall


If the extensive planning and review process works as proponents hope, big banks will become less hazardous to the public and regulators will be more confident that they can let wounded institutions die without wrecking the economy. 


In congressional hearings earlier this month, JPMorgan CEO Jamie Dimon said that the bank’s contingency plan for going out of business would let it fail without cost to taxpayers. Living wills reduce the systemic risk of a big bank failing, Dimon said. 


The living will requirement could actually yield similar results to restoring Glass-Steagall without actual re-enactment of the Depression-era laws separating commercial banking from investment banking, former FDIC Chairman Sheila Bair told Reuters TV earlier this month. 


Bair said regulators may determine that for a liquidation plan to work, a bank must separate traditional banking and insured deposits into subsidiaries set apart from volatile securities trading and securities underwriting.


The rules push banks to untangle their complex structures, which can include thousands of legal entities, and which, in Bair’s opinion, have effectively blocked proposals for breaking up the corporations. 


Whether the Fed and the FDIC would actually force any banks to sell businesses or cordon off insured deposits remains to be seen, cautioned Richard Herring, a banking professor at the University of Pennsylvania.


“We don’t know if they will have the guts to do it, but the tools are there,” said Herring, a leading proponent of living wills for more than a decade, who was appointed to an FDIC advisory panel on the plans. 


Herring worries, too, that the plans will be so long and complex that they will overwhelm the staff at the agencies. 


Still, that the plans are being written at all is progress, Herring said.


Plan for Two Ways to Die 


Under the Dodd-Frank Act, banks and regulators must imagine liquidations in two different ways. The first is through bankruptcy courts with banks negotiating with their creditors. This is the going-out-of-business method planned in the living wills due July 1. The living wills must include how subsidiaries in foreign jurisdictions will be liquidated. 


The second way is through a new kind of liquidation process in which the FDIC takes control of putting a financial giant down. This method has more flexibility than is allowed in bankruptcy courts, but still uses critical information collected in the banks’ living wills, such as where exactly to find collateral. 


The new rules stagger deadlines for the banks to file plans, depending on their size and complexity. Nine banks will file first, including five based in the United States and four owned abroad. Regulators have declined to name the nine banks included in the first round. 


Other large banks will have until July and December of next year to hand in their plans, according to the FDIC. Eventually about 124 banks are expected to submit plans, according to the FDIC. There are about 7,300 banks in the United States. 


Regulators and the big banks have been meeting since January on what the plans are expected to include. Fed and FDIC officials have said they expect the back-and-forth to continue once the plans have been submitted. The rules give the banks a series of chances to refine their plans. 


But if banks cannot come up with feasible liquidation plans, regulators could order the banks to get rid of businesses. Government intervention is a last resort, said John Simonson, the FDIC’s deputy director of Systemic Resolution Planning and Implementation in the Office of Complex Financial Institutions. 


“I think a lot of progress can be made in having these firms make themselves more resolvable before you get to that point of actually imposing those severe remedies,” Simonson said. The regulators will want to see evidence that the banks can safely resolve their debts and transfer vital customer services and assets to healthy institutions. 


The plans could easily be 2,000 or 4,000 pages long, depending on the complexity of the banks, said Ryan of PricewaterhouseCoopers. The plans include “very granular detail” about bank operations, he noted, adding that “in many cases, this is a large documentation exercise.” 


For example, the banks must spell out plans for hiring lawyers and contacting regulators in key countries. 


The rules for crafting the living wills are 74 pages long, including an explanatory supplement. The plans could even include drafts of press releases showing how the banks would announce that they are going out of business, Herring said.



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The Declaration of Human Freedom

The Declaration of Human Freedom

http://stevebeckow.com/wp-content/uploads/2011/02/Earth1.jpg


Every being is a divine and eternal soul living in a temporal body. Every being was alive before birth and will live after death.

Every soul enters into physical life for the purpose of experience and education, that it may, in the course of many lifetimes, learn its true identity as a fragment of the Divine.

Life itself is a constant process of spiritual evolution and unfoldment, based on free choice, that continues until such time as we realize our true nature and return to the Divine from which we came.

No soul enters life to serve another, except by choice, but to serve its own purpose and that of the Divine from which it came.

All life is governed by natural and universal laws which precede and outweigh the laws of humanity. These laws, such as the law of karma, the law of attraction, and the law of free will, are decreed by God to order existence and assist each person to achieve life’s purpose.

No government can or should survive that derives its existence from the enforced submission of its people or that denies its people their basic rights and freedoms.

Life is a movement from one existence to another, in varied venues throughout the universe and in other universes and dimensions of existence. We are not alone in the universe but share it with other civilizations, most of them peace-loving, many of whom are more advanced than we are, some of whom can be seen with our eyes and some of whom cannot.

The evidence of our five senses is not the final arbiter of existence. Humans are spiritual as well as physical entities and the spiritual side of life transcends the physical. God is a Spirit and the final touchstone of God’s Truth is not physical but spiritual. The Truth is to be found inward.

God is one and, because of this, souls are one. They form a unity. They are meant to live in peace and harmony together in a “common unity” or community. The use of force to settle affairs runs contrary to natural law. Every person should have the right to conduct his or her own affairs without force, as long as his or her choices do not harm another.

No person shall be forced into marriage against his or her will. No woman shall be forced to bear or not bear children, against her will. No person shall be forced to hold or not hold views or worship in a manner contrary to his or her choice. Nothing vital to existence shall be withheld from another if it is within the community’s power to give.

Every person shall retain the ability to think, speak, and act as they choose, as long as they not harm another. Every person has the right to choose, study and practice the education and career of their choice without interference, provided they not harm another.

No one has the right to kill another. No one has the right to steal from another. No one has the right to force himself or herself upon another in any way.

Any government that harms its citizens, deprives them of their property or rights without their consent, or makes offensive war upon its neighbors, no matter how it misrepresents the situation, has lost its legitimacy. No government may govern without the consent of its people. All governments are tasked with seeing to the wellbeing of their citizens. Any government which forces its citizens to see to its own wellbeing without attending to theirs has lost its legitimacy.

Men and women are meant to live fulfilling lives, free of want, wherever they wish and under the conditions they desire, providing their choices do not harm another and are humanly attainable.

Children are meant to live lives under the beneficent protection of all, free of exploitation, with unhindered access to the necessities of life, education, and health care.

All forms of exploitation, oppression, and persecution run counter to universal and natural law. All disagreements are meant to be resolved amicably.

Any human law that runs counter to natural and universal law is invalid and should not survive. The enactment or enforcement of human law that runs counter to natural and universal law brings consequences that cannot be escaped, in this life or another. While one may escape temporal justice, one does not escape divine justice.

All outcomes are to the greater glory of God and to God do we look for the fulfillment of our needs and for love, peace, and wisdom. So let it be. Aum/Amen.

http://stevebeckow.com/worldwide-march-millions/declaration-human-freedom/.


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オバマが国際刑事裁判所に再加入・・・米国はもはやならず者国家ではない 2012年5月3日

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