In the event of another severe financial crisis, three U.S. banking giants could end up going the way of the dodo, or at least the way of Lehman Brothers. According to the public portion of the large U.S. banks’ “living wills,” a new post-crisis regulatory requirement, Goldman Sachs Group Inc GS 1.41%, Citigroup Inc C 1.8% and Morgan Stanley MS 1.76% would completely wind down their businesses in the event that a crisis forces their bankruptcies.
Preventing Another Crisis
After the banks’ 2014 living wills were harshly criticized by regulators for their inadequacies, the banks seem to have taken the next step this year in planning their hypothetical demises.
The banks are not required to completely dissolve their businesses in their living wills; the objective is to plan for another worst-case scenario to prevent the types of chaotic scenarios that occurred during the Financial Crisis, which required government intervention and taxpayer bailouts for many of the U.S.’s biggest banks.
Other Big Names
While Goldman Sachs, Citi and Morgan Stanley are content to wave the hypothetical white flag, JPMorgan Chase & Co. JPM 1.55% has…
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