Remarks by
Martin J. Gruenberg
Chairman
Federal Deposit Insurance Corporation
“Resolving a Systemically Important Financial Institution: A Progress Report”
The Wharton School
University of Pennsylvania
Philadelphia, PA
February 16, 2018
Martin J. Gruenberg
Chairman
Federal Deposit Insurance Corporation
“Resolving a Systemically Important Financial Institution: A Progress Report”
The Wharton School
University of Pennsylvania
Philadelphia, PA
February 16, 2018
1
Introduction
I would like to thank the Wharton School, its Financial Institutions Center, the Law School, the
Department of Economics, the Institute for Law and Economics, and the Penn Program on
Regulation for inviting me to speak today.
I would also like to acknowledge Dick Herring of the Wharton School for his contributions to the
FDIC’s efforts to address the very challenging issue of the resolution of systemically important
financial institutions (SIFIs).
Dick has served as a valuable member of the FDIC’s Systemic Resolution Advisory Committee.
He emphasized the importance of transparency of the living will resolution plans, and assisted us
in identifying critical information that should be made available in the public portions of those
plans.
He also hosted here at the Wharton School two meetings of bankruptcy experts, including
judges, practitioners, and academics, to discuss the challenges associated with orderly resolution
in bankruptcy.
Today, I would like to discuss why this work is so important, the progress that’s been made, and
why we need to remain focused on addressing this critical issue.
I joined the FDIC Board in 2005 and served through the financial crisis of 2008–2009, the
enactment of the Dodd-Frank Act in 2010, and the post-crisis recovery. I became Acting
Chairman in July 2011 and was confirmed as Chairman in November 2012. Much of my time at
the FDIC has been spent responding to, and working to avoid another financial crisis.
A central objective of this effort has been developing the capability for the orderly failure of a
systemically important financial institution, without taxpayer support, and with accountability for
the shareholders, creditors, and management of the failed firm. This has been a top priority for
the FDIC for several reasons.
First, the FDIC lacked the authority during the financial crisis to manage the orderly failure of a
systemically important financial institution. As a result, the options available to the financial
regulatory agencies during the crisis were limited to providing public support to open institutions
Introduction
I would like to thank the Wharton School, its Financial Institutions Center, the Law School, the
Department of Economics, the Institute for Law and Economics, and the Penn Program on
Regulation for inviting me to speak today.
I would also like to acknowledge Dick Herring of the Wharton School for his contributions to the
FDIC’s efforts to address the very challenging issue of the resolution of systemically important
financial institutions (SIFIs).
Dick has served as a valuable member of the FDIC’s Systemic Resolution Advisory Committee.
He emphasized the importance of transparency of the living will resolution plans, and assisted us
in identifying critical information that should be made available in the public portions of those
plans.
He also hosted here at the Wharton School two meetings of bankruptcy experts, including
judges, practitioners, and academics, to discuss the challenges associated with orderly resolution
in bankruptcy.
Today, I would like to discuss why this work is so important, the progress that’s been made, and
why we need to remain focused on addressing this critical issue.
I joined the FDIC Board in 2005 and served through the financial crisis of 2008–2009, the
enactment of the Dodd-Frank Act in 2010, and the post-crisis recovery. I became Acting
Chairman in July 2011 and was confirmed as Chairman in November 2012. Much of my time at
the FDIC has been spent responding to, and working to avoid another financial crisis.
A central objective of this effort has been developing the capability for the orderly failure of a
systemically important financial institution, without taxpayer support, and with accountability for
the shareholders, creditors, and management of the failed firm. This has been a top priority for
the FDIC for several reasons.
First, the FDIC lacked the authority during the financial crisis to manage the orderly failure of a
systemically important financial institution. As a result, the options available to the financial
regulatory agencies during the crisis were limited to providing public support to open institutions