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Treasury reviews bank bankruptcy process

Joe Mont | February 21, 2018

A new report, released Wednesday by the Treasury Department, details what officials see as serious flaws with the Dodd-Frank Act’s orderly liquidation authority.

The report responds to the Presidential Memorandum directing Treasury to propose recommendations to align OLA with the Core Principles for Financial Regulation and determine whether the Bankruptcy Code should be reformed to better enable resolution of financial companies. 

Treasury's recommendations “ensure that taxpayers are protected by strengthening the bankruptcy procedure for a failed financial company and retaining OLA in very limited circumstances with significant reforms,” the report says.

“Treasury recommendations seek to ensure that our financial system is resilient while protecting taxpayers and promoting market discipline,” said Secretary Steven Mnuchin. “The bankruptcy reforms that we propose will make the shareholders, management, and creditors of a financial company bear any losses from...

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