[Federal Register Volume 76, Number 83 (Friday, April 29, 2011)]
[Notices]
[Pages 24024-24025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-9986]
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FEDERAL RESERVE SYSTEM
[Docket Number OP-1418]
Request for Information Relating to Studies Regarding the
Resolution of Financial Companies Under the Bankruptcy Code
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Notice and request for information.
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SUMMARY: Section 216 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the ``Dodd-Frank Act'') requires the Board, in
consultation with the Administrative Office of the United States Courts
(the ``AOUSC''), to conduct a study regarding the resolution of
financial companies under Chapter 7 or Chapter 11 of the United States
Bankruptcy Code (Title 11, U.S. Code) (the ``Bankruptcy Code'').
Section 217 of the Dodd-Frank Act requires the Board, in consultation
with the AOUSC, to conduct a study regarding international coordination
relating to the resolution of systemic financial companies under the
Bankruptcy Code and applicable foreign law. Section 216 and Section 217
of the Dodd-Frank Act each identifies specific issues that are to be
studied under the relevant section. The Board is issuing this request
for information through public comment to assist the Board in
conducting these studies.
DATES: Comment due date: May 31, 2011.
ADDRESSES: You may submit comments, identified by Docket No. OP-1418,
by any of the following methods:
Agency Web Site: http://www.federalreserve.gov. Follow the
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
E-mail: [email protected]. Include the
docket number in the subject line of the message.
Fax: (202) 452-3819 or (202) 452-3102.
Mail: Address to Jennifer J. Johnson, Secretary, Board of
Governors of the Federal Reserve System, 20th Street and Constitution
Avenue, NW., Washington, DC 20551.
All public comments will be made available on the Board's Web site
at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as
submitted, unless modified for technical reasons. Accordingly, comments
will not be edited to remove any identifying or contact information.
Public comments may also be viewed electronically or in paper in Room
MP-500 of the Board's Martin Building (20th and C Streets, NW.) between
9 a.m. and 5 p.m. on weekdays.
FOR FURTHER INFORMATION CONTACT: Sophia Allison, Senior Counsel (202/
452-3565), or Gillian Burgess, Senior Attorney (202/736-5564), Legal
Division; for users of Telecommunications Device for the Deaf (TDD)
only, contact (202/263-4869); Board of Governors of the Federal Reserve
System, 20th and C Streets, NW., Washington, DC 20551.
SUPPLEMENTARY INFORMATION:
I. Background
The Dodd-Frank Act was enacted on July 21, 2010. Under Section 216
of the Dodd-Frank Act, the Board is required to conduct a study, in
consultation with the AOUSC, regarding the resolution of financial
companies under Chapter 7 or Chapter 11 of the Bankruptcy Code (the
``Section 216 Study''). Section 216 specifies five specific issues that
are to be included in the Section 216 Study (124 Stat. 1519) Pub. Law
111-203, JULY 21, 2010. These issues generally are: (1) The
effectiveness of the Bankruptcy Code in resolving systemic financial
companies, (2) whether a special resolution court or panel for
financial companies should be established, (3) whether amendments
should be made to the Bankruptcy Code for dealing with financial
companies, (4) whether the way that qualified financial contracts
(QFCs) of financial companies in resolution are treated should be
changed; and (5) whether a special chapter of the Bankruptcy Code for
[[Page 24025]]
dealing with financial companies should be created.
Section 217 of the Dodd-Frank Act requires the Board, in
consultation with the AOUSC, to conduct a study regarding international
coordination relating to the resolution of systemic financial companies
under the Bankruptcy Code and applicable foreign law (the ``Section 217
Study''). Section 217 specifies four specific issues that are to be
included in the Section 217 Study. These issues generally are: (1)
Whether international coordination exists, (2) the facilitation of such
international coordination; (3) the barriers to such coordination; and
(4) the ways to improve such coordination.
II. Solicitation for Comments on the Bankruptcy Studies
To assist the Board in conducting the Section 216 Study and the
Section 217 Study, the Board seeks public comment on the following
questions:
1. With respect to the Section 216 Study, how should the Board
address the following areas, taking into account among other things the
enactment of Title II of the Dodd-Frank Act?
(i) The effectiveness of chapter 7 and chapter 11 of the Bankruptcy
Code in facilitating the orderly resolution or reorganization of
systemic financial companies;
(A) The key factors and considerations that should be taken into
account in assessing the ``effectiveness'' of the Bankruptcy Code in
facilitating the orderly resolution or reorganization of systemic
financial companies;
(B) The key factors and considerations that should be taken into
account in assessing whether the Bankruptcy Code is effective in
facilitating the ``orderly'' resolution or reorganization of systemic
financial companies;
(C) The extent to which the effectiveness of the Bankruptcy Code in
facilitating the orderly resolution or reorganization of ``systemic
financial companies'' differs from the effectiveness of the Bankruptcy
Code in facilitating the orderly resolution or reorganization of non-
systemic financial companies;
(ii) Whether a special financial resolution court or panel of
special masters or judges should be established to oversee cases
involving financial companies to provide for the resolution of such
companies under the Bankruptcy Code, in a manner that minimizes adverse
impacts on financial markets without creating moral hazard;
(A) The ``adverse impacts on financial markets'' that would be
minimized by the establishment of such a court or panel;
(B) How establishing such a court or panel would minimize ``moral
hazard;''
(C) The key factors and considerations that should be taken into
account in assessing whether the establishment of such a court or panel
would minimize such adverse impacts without creating such moral hazard;
(iii) Whether amendments to the Bankruptcy Code should be adopted
to enhance the ability of the Code to resolve financial companies in a
manner that minimizes adverse impacts on financial markets without
creating moral hazard;
(A) The ``adverse impacts on financial markets'' that would be
minimized by amendments to the Bankruptcy Code;
(B) How such amendments would minimize ``moral hazard;''
(C) The specific amendments to the Bankruptcy Code that would
minimize such adverse impacts without creating such moral hazard;
(D) The key factors and considerations that should be taken into
account in assessing whether such amendments to the Bankruptcy Code
would minimize such adverse impacts without creating such moral hazard;
(iv) Whether amendments should be made to the Bankruptcy Code, the
Federal Deposit Insurance Act, and other insolvency laws to address the
manner in which qualified financial contracts of financial companies
are treated;
(A) The specific amendments to the Bankruptcy Code, the Federal
Deposit Insurance Act, and other insolvency laws that might be made to
address the manner in which qualified financial contracts of financial
companies are treated;
(B) The key factors and considerations that should be taken into
account in assessing whether such amendments to the Bankruptcy Code,
the Federal Deposit Insurance Act, and other insolvency laws should be
made;
(C) The key factors and considerations that should be taken into
account in assessing the likely outcome of making or not making such
amendments;
(v) The implications, challenges, and benefits to creating a new
chapter or subchapter of the Bankruptcy Code to deal with financial
companies;
(A) The key factors and considerations that should be taken into
account in assessing whether a new chapter or subchapter of the
Bankruptcy Code should be created to deal with financial companies;
(B) The benefits that might result from the creation of a new
chapter or subchapter of the Bankruptcy Code to deal with financial
companies;
(C) The extent to which such benefits would not be likely to be
obtained without creating such a new chapter or subchapter;
(D) The challenges that might be faced by creating a new chapter or
subchapter of the Bankruptcy Code to deal with financial companies; and
(E) The key factors and considerations that should be taken into
account in assessing the likely outcome of creating or not creating a
new chapter or subchapter of the Bankruptcy Code to deal with financial
companies.
2. With respect to the Section 217 Study, how should the Board
address the following areas?
(i) The extent to which international coordination currently
exists;
(ii) Current mechanisms and structures for facilitating
international cooperation;
(iii) Barriers to effective international coordination; and
(iv) ways to increase and make more effective international
coordination of the resolution of financial companies, so as to
minimize the impact on the financial system without creating moral
hazard.
3. With respect to both the Section 216 Study and the Section 217
Study:
(i) Any studies, research, empirical data or other information
supporting any comments on any of the foregoing questions, where
available; and
(ii) Any additional factors or considerations that should be taken
into account in either the Section 216 Study or the Section 217 Study.
By order of the Board of Governors of the Federal Reserve
System, April 20, 2011.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 2011-9986 Filed 4-28-11; 8:45 am]
BILLING CODE 6210-01-P