Nine of the world’s biggest banks (UBS, Credit Suisse, Deutsche Bank, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, JPMorgan Chase and Barclays) have released “living wills,” or the road maps that were requested by US regulators to help with the financial firms’ liquidation in a severe crisis.
For example, Goldman Sachs said that, in the event the bank goes under, it would be better to sell its various businesses individually rather than to initiate a company-wide asset liquidation that could weigh on markets. Citigroup stated that in some scenarios it would be preferable to divest the firm’s brokerage businesses before the parent company failed. According to Swiss bank UBS, only its very large competitors would likely be capable of buying its businesses in a crisis due to the size of its operations. In contrast, JPMorgan Chase believes there are “multiple, diverse and not necessarily overlapping potential buyers” for its core businesses which the lender judges to be “highly attractive.” UBS competitor Credit Suisse meanwhile suggested that hedge funds as well as banks and securities firms could purchase its various businesses. Regulators will have 60 days to accept or reject the resolution plans. Around 125 financial institutions are required by the law to submit living wills to the US Federal Reserve and the Federal Deposit Insurance Corp. by the end of 2013.