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Thursday, May 10, 2012

ABA: No Bank Should Be Too Big To Fail

ABA President and CEO Frank Keating in reposnse to the FDIC’s announcment today of a strategy for resolving large systemically important financial firm:
ABA has always believed that no bank – or company – should be too big to fail, and the FDIC’s resolution strategy represents an important step in that direction. In any failure, it’s the equity owners that should take losses. This strategy assures that but would continue the operations of the firm going forward to minimize market disruptions. The plan emphasizes private sector responsibility and properly ensures that investors take losses from any failure. It’s critical that equity owners in firms large and small understand their principal is at risk, and that they will bear all losses – with no taxpayer assistance.

This role to resolve the failure of systemically important institutions is in addition to the FDIC’s role to protect insured depositors in the event of a bank failure. No insured depositor has ever lost money in FDIC-insured account. We look forward to working with the FDIC as they implement this plan going forward.

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