FDIC OKs plan for taking over failing financial firms

|By:, SA News Editor

The board of the Federal Deposit Insurance Corp. (FDIC) has authorized a draft plan on how the agency would break up large financial firms that are about to collapse and without a taxpayer bailout.

The FDIC has the authority to take over failing banks under the 2010 Dodd-Frank rule in order to limit the impact of any collapse on the financial system; the regulator would keep the operating parts of an institution open, prioritize creditor repayments - although this includes imposing losses as well - and it would recapitalize a firm.

The agency is now seeking public comment on the plan.

ETFs: FAS, XLF, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, PFI, KBWB, RWW, FINU, RYF, PSCF, FNCL, FINZ