Regulators are holding off on assuming the power to unwind struggling financial institutions that pose significant systemic risk, Reuters reports.
The Federal Deposit Insurance Corporation said it needs more time to figure out how it’s going to implement new rules governing the orderly dismantling of “too-big-to-fail” firms, partly because some members of the Financial Stability Oversight Council (sort of a Pro Bowl team of banking regulators that includes Tim Geithner, Ben Bernanke, Sheila Bair and Mary Schapiro) haven’t yet looked over the proposal.
The FDIC board expects to vote on the proposal in early 2011, banking regulators told Reuters.
One of the chief provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act grants the FDIC the ability to break up enormous firms whose collapse would create chaos in the financial markets.
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