Title II – Orderly Liquidation Authority
E618765
Title II – Orderly Liquidation Authority is a key section of the Dodd-Frank Wall Street Reform and Consumer Protection Act that establishes a framework for the federal government to wind down failing systemically important financial institutions outside the traditional bankruptcy process.
Statements (48)
| Predicate | Object |
|---|---|
| instanceOf |
section of federal statute
ⓘ
title of the Dodd-Frank Act ⓘ |
| addresses | resolution of nonbank financial companies posing systemic risk ⓘ |
| aimsTo |
provide market discipline for large financial firms
ⓘ
reduce moral hazard associated with expectations of government bailouts ⓘ |
| appliesTo |
financial companies other than insured depository institutions
ⓘ
systemically important financial institutions ⓘ |
| authorizes |
FDIC to impose losses on shareholders and certain creditors
ⓘ
FDIC to repudiate burdensome contracts subject to statutory limits ⓘ FDIC to sell assets of covered financial companies NERFINISHED ⓘ FDIC to take over and wind down failing financial companies ⓘ FDIC to transfer assets and liabilities to a bridge financial company ⓘ |
| complements | traditional bankruptcy process ⓘ |
| designatesAs | FDIC as receiver for covered financial companies ⓘ |
| establishes | Orderly Liquidation Fund NERFINISHED ⓘ |
| establishesProcess | orderly liquidation of covered financial companies ⓘ |
| excludes | insured depository institutions resolved under the Federal Deposit Insurance Act ⓘ |
| grantsAuthorityTo | Federal Deposit Insurance Corporation NERFINISHED ⓘ |
| hasPurpose |
avoid taxpayer-funded bailouts
ⓘ
mitigate systemic risk to the U.S. financial system ⓘ protect financial stability and the U.S. economy ⓘ provide an alternative to bankruptcy for failing systemically important financial institutions ⓘ |
| imposes |
haircuts on unsecured creditors after shareholders are wiped out
ⓘ
priority scheme for payment of claims ⓘ |
| influences | U.S. regulatory approach to too-big-to-fail institutions ⓘ |
| isCodifiedIn | Title 12 of the United States Code NERFINISHED ⓘ |
| jurisdiction | United States federal law NERFINISHED ⓘ |
| limits | scope and timing of judicial review to avoid delay in resolution ⓘ |
| partOf | Dodd-Frank Wall Street Reform and Consumer Protection Act NERFINISHED ⓘ |
| prohibits | use of taxpayer funds to prevent losses to shareholders or creditors ⓘ |
| providesFundingMechanism | borrowing from the U.S. Treasury subject to limits ⓘ |
| relatedTo |
financial stability oversight
ⓘ
resolution planning for large financial institutions ⓘ systemic risk regulation ⓘ |
| requires |
assessments on eligible financial companies if proceeds are insufficient
ⓘ
judicial review of the Treasury Secretary’s systemic risk determination ⓘ repayment of Orderly Liquidation Fund from proceeds of asset sales ⓘ |
| requiresConsultationWith | President of the United States NERFINISHED ⓘ |
| requiresCriteria |
creditors and shareholders bear losses
ⓘ
management responsible for the failure is removed ⓘ no viable private sector alternative is available ⓘ resolution under otherwise applicable law would have serious adverse effects on U.S. financial stability ⓘ resolution under this title would avoid or mitigate adverse effects on financial stability ⓘ |
| requiresCriteria | financial company in default or in danger of default ⓘ |
| requiresDeterminationBy | Secretary of the Treasury NERFINISHED ⓘ |
| requiresRecommendationFrom |
Board of Governors of the Federal Reserve System
NERFINISHED
ⓘ
FDIC NERFINISHED ⓘ |
| wasEnactedAsPartOf | Dodd-Frank Act of 2010 NERFINISHED ⓘ |
Referenced by (1)
Full triples — surface form annotated when it differs from this entity's canonical label.