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JOIN THE COMMITTEE ONLINE!
FREE FOR ALL BUSINESS LAW MEMBERS
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Message from the Chair
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I am pleased to send you this Banking Law Committee Journal article that
comprehensively reviews the FDIC's role as conservator or receiver, the
issues it faces, and the resolution methods the FDIC has used in these
circumstances. I commend this and the now extensive set of prior articles
on our website to you, both in terms of the relevance of the topics covered
and the quality of the articles. All Committee members should make a habit
of reviewing these articles as they provide examples of the blending of
legal expertise and practical experience that make the Committee very
useful for lawyers who represent financial institutions, trade associations,
and government regulatory agencies. Hopefully, this Journal will be the initial
step you take in your use of the Committee as well as be helpful in acquiring
practical insights in how to understand and address the legal, policy and
compliance issues with which you are dealing.
Please also feel free to contribute to this initiative and tradition, including
by providing your opinion or analysis on current topical issues. Write a short
article for the next edition and send it to Chris Bellini at
cbellini@ gibsondunn.com. You will be speaking to the 1800+ members of the Committee.
Also, feel free to call him (202-887-3693) or contact him at our meetings if you
want to discuss a proposed article or have other material suitable to be posted on
our website for our members.
Remember, the Spring Meeting scheduled for April 16-18th in Vancouver is upon us.
In this post-EESA and post-ARRA (stimulus package) environment, we will have loads
to learn and to talk about. We have many impressive programs and CLE events.
We also will have speakers from Treasury and the banking agencies. A terrific
dinner is planned at the Five Sails Restaurant in the Pan Pacific Hotel.
To register for the meeting go to:
http://www.abanet.org/buslaw/meetings/2009/spring/reg.shtml.
Hope to see you there. Sally.
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Featured Articles
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A Review of the FDIC's Latest Tools for Resolving Problem Banks
Thomas P. Vartanian and Gordon L. Miller
The challenges before the Federal Deposit Insurance Corporation (FDIC)
can hardly be overstated. A storm of bank and thrift problems has gathered,
a deluge of institution failures has befallen the FDIC, and the downpour
promises only to intensify. This article provides an overview of the issues
the FDIC faces as conservator or receiver for the nation's banks and thrifts,
and the tools it has deployed to date or is likely to consider, on a case-by
case and industry-wide basis, to deal with the deepening global economic woes.
As history and experience have taught us, little notice is taken during good
times of economic storm clouds as they begin to form. The origin of the storm
this time was the overleveraging of America, fostered by the benevolent nudging
of government to make home ownership affordable and sustained by the desire at
every wrung in the socioeconomic ladder to profit from doing so, whether or not
the home buyer could afford his aspirations. As we also have learned, banks
mirror the economy, and, when the economy is hurting, so are banks. It is no
surprise, therefore, that banks in increasing numbers become undercapitalized
or insolvent during hard times. It would be unprecedented if it did not happen.
The issue for banking regulators in hard times is how to help patch together banks'
balance sheets torn by the economic storms and help most of them to survive until
normal conditions return, as they always do. The other side of the proposition is to
identify the banks that cannot survive until normality returns, and to resolve them
in the least costly and most efficient manner possible. The latter job is the FDIC's
responsibility.
More...
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