The Orderly Liquidation Authority established by the Dodd-Frank Act is meant to address two of the Obama Administration’s most important goals for the financial regulatory overhaul: the elimination of taxpayer bailouts and the end of “too big to fail.” The new law replaces the Bankruptcy Code for liquidating financial companies, granting the Treasury Secretary the authority to appoint the FDIC as receiver of any financial company if certain conditions are satisfied. It attempts to balance the goals of the bankruptcy and customer protection laws with the goals of preserving or restoring financial stability, public confidence and reasonable risk-taking that may have been disrupted as a result of a financial panic.
Below is a link to a brief Wall Street Journal video interview of Randall D. Guynn, head of Davis Polk’s Financial Institutions Group, in which Mr. Guynn discusses the broad new powers granted to the FDIC to liquidate financial companies, how the authority will be applied, the Act’s efforts to harmonize certain aspects of the Orderly Liquidation Authority with the Bankruptcy Code and the treatment of creditors under the Act.
Click here to access the WSJ video interview.
|