Living wills are typically obtained by individuals who are dealing with life-prolonging medical treatment and other issues they wish to have carried out should they become incapacitated. But a potential ruling by the Federal Deposit Insurance Corp. could force living wills on financial firms.
The resolution plans, or living wills, will give regulators of some of the largest U.S. financial firms a plan to follow in the event of another financial crisis. It is still under consideration, with a final ruling expected to come from the FDIC soon.
"I'm pushing to get something done before I leave," Sheila Bair, FDIC chairman, told reporters. Bair will step down from her position on July 8.
These living wills are being implemented in order to avoid another financial meltdown similar to the 2008 financial crisis, which led to the federal bailout of many U.S. big businesses.
According to Nasdaq, regulators say they lacked the tools necessary to deal with these struggling financial firms but have received new power courtesy of the Dodd–Frank Wall Street Reform and Consumer Protection Act.