The Federal Reserve has required the largest American banks to create “living wi

Question

The Federal Reserve has required the largest American banks to create “living wills” for the purpose of:

A. Knowing what the Federal Reserve should do should bank management become incapacitated for any reason, whatsoever

B. Creating an automatic plan of action for unwinding and dissolving a bank should it encounter a financial crisis without affecting other financial services firms

C. Having an emergency plan in place for bailing out the banks the next time they encounter a financial crisis

D. Ensuring that all bank officials have sufficient life insurance as a cushion for any losses which the banks might incur

E. Making sure that a risk management firm is on hand to mitigate risks which the financial services company might take on

Explanation / Answer

The federal reserve has asked big banks to create 'living wills' for the purpose of

b) creating an automatic plan of action for unwinding and dissolving a bank should it encounter a financial crisis without affecting other financial services firms.

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