• (p26-27) - Blaine LUETKEMEYER (R-MO). One of the things that I, quite frankly, like about the Dodd-Frank Act is the living will that these agencies— not agencies but entities—are going to have to put together.
  • Can you describe to me some of the tenants that would be in a living will that would be important to you to see that were in there and how it would operate?
• Lance AUER (Deputy Assistant Secretary for Financial Institutions, U.S. Department of the Treasury) - The living will requires that the company describe how it could be resolved under the Bankruptcy Code.
  • So for companies that are very complicated, the living will needs to have a description of how different legal entities within the company interact with one another, so that if different legal entities are subject to different bankruptcy procedures or different regulatory procedures, exposures of one entity aren’t so tied in with another that it just creates an intractable situation.
  • By having that information in advance, and especially by requiring the companies to produce that information and understand what those impediments to resolution could be, we can then use our supervisory process to push the companies to reduce the impediments to resolution and make them more resolvable.
• Mr. LUETKEMEYER. What you are saying is a living will basically lays out the connectivity of all of the things that are going on within that company?
• Mr. AUER. That is one of the important aspects of it, yes. 

2012 0516 - GOV (House) - The Impact of the Dodd-Frank Act: What it Means to be a Systemically Important Financial Institution, (CSPAN) Designation of Systemically Significant Financial Institutions, Economists Panel - [PDF-121p,