The recent financial crisis exposed a major gap in the regulatory system: the inability for the government to safely wind down a failing financial firm that was not a commercial bank, such as Lehman Brothers or AIG. The Dodd-Frank law attempted to fix this by empowering regulators with new tools including a new Orderly Liquidation Authority (OLA) under which the Federal Deposit Insurance Corp would liquidate and wind-up a failing institution. Although never used, OLA is controversial. Some Congressional Republicans would do away with it, and the Trump Administration has undertaken its review.
On June 6, Brookings’s Center on Regulation and Markets and Hutchins Center on Fiscal and Monetary Policy brought together four experts—including former Federal Reserve Chairman Ben Bernanke—with differing views on preserving or modifying OLA.
After the session, panelists took audience questions.
For further reading on OLA from the panelists, read contributions from Hester Peirce, H. Rodgin Cohen, and David Skeel to the Series on Financial Markets and Regulation. You can read Ben Bernanke’s defense of OLA on his Brookings blog.
S. Samuel Arsht Professor Corporate Law - University of Pennsylvania Law School
Senior Chairman - Sullivan & Cromwell LLP
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