What is orderly liquidation authority?
Title II, the Orderly Liquidation provision of the Dodd-Frank Act, provides a process to quickly and efficiently liquidate a large, complex financial company that is close to failing.
How is the orderly liquidation fund funded?
Title II of Dodd-Frank created a new fund, the Orderly Liquidation Authority (OLA), to be funded by complex, large institutions and non-bank SIFIs. Unlike the DIF which is pre-funded, OLA is funded only after a failure. The Treasury lends the FDIC money to resolve the institution.
What does Dodd-Frank Act do?
The most far reaching Wall Street reform in history, Dodd-Frank will prevent the excessive risk-taking that led to the financial crisis. The law also provides common-sense protections for American families, creating new consumer watchdog to prevent mortgage companies and pay-day lenders from exploiting consumers.
How do I protect myself from a bank bail in?
1 Diversify savings across banks and in different countries. 2 Consider counterparty risk and the health of the deposit-taking bank. 3 Attempt to own assets outright and reduce risk to custodians and trustees. 4 Own physical gold in allocated accounts with outright legal ownership.
What is the priority order of distribution of liquidation proceeds?
In general, secured creditors have the highest priority followed by priority unsecured creditors. The remaining creditors are often paid prior to equity shareholders.
What kind of insurance does the FDIC provide?
deposit insurance
The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. The FDIC insures deposits that a person holds in one insured bank separately from any deposits that the person owns in another separately chartered insured bank.
Can banks legally confiscate your deposits without your permission to bail themselves out?
The fact is, any money you store in a banking institution now becomes an unsecured debt, and you become an unsecured creditor that is called on to share in the burden of a bank loss. You have little- to-no legal recourse. Act gives the right for banks to confiscate those funds in and use them as needed.
What are the main prongs of the Volcker Rule?
Per the 2013 Final Rule “trading account” was defined based on three main prongs: (1) short-term intent prong1, (2) market risk capital prong2, and (3) dealer prong3.
What is the New Orderly Liquidation Authority?
This new Orderly Liquidation Authority is designed to help liquidate financial firms that are systemically important and fail. All entities that fall under the new regulation provided by the Financial Stability Oversight Council and the Federal Reserve will be resolved under this new mechanism.
What is the Orderly Liquidation Fund?
The new resolution authority comes with access to a new source of liquidity support provided by the Dodd-Frank Act: the Orderly Liquidation Fund, or OLF, located in the Treasury Department. The OLF must either be repaid from recoveries on the assets of the failed firm or from assessments against the largest, most complex financial companies.
When did Title II Orderly Liquidation Authority come into effect?
Title II Orderly Liquidation Authority December 10, 2012 2 Agenda Update on Title II Operationalizing Title II Inter-Agency Coordination & Events Outreach Decision to Implement Title II