Yet, with their purposes of ensuring that even the largest firms can fail and be wound down in an orderly fashion, and of countering too-big-to-fail perceptions associated with systemically important financial institutions, they belong on those lists. One such tool that has gotten more attention in the past year is the resolution planning process established by section 165(d) of the Dodd-Frank Act.
The Federal Reserve and the FDIC have identified substantial shortcomings in many of the plans submitted to date. In the next round of submissions, due this summer, these firms will need to produce plans that show they could be resolved in bankruptcy in an orderly fashion.