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David Helene
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Issue Examines Most Pressing Matters Relating to the Creation of a Resolution Framework for Large Banks 

New York, NY – March 28, 2014 – The Clearing House (TCH) today released its first quarter 2014 issue of its quarterly journal, Banking Perspectives, which focuses on critical issues pertaining to the establishment of a credible and workable resolution framework for large, complex banks. The seven featured articles in this issue – authored by leading academics, former policymakers, and industry practitioners – address vital topics ranging from the role of long-term debt in a single-point-of-entry recapitalization to an enhanced Bankruptcy Code to cross-border coordination, and more.

“Developing a viable resolution framework for large banks is critical to ending any remaining perception of “too big to fail,” said Paul Saltzman, President of The Clearing House Association and General Counsel and Executive Vice President of The Clearing House Payments Company. “As we stand at a major inflection point in the banking industry in establishing such a framework, The Clearing House thought it important to use this issue of Banking Perspectives to contribute to the dialogue on this topic – which is fundamental to the debate on financial reform – and help bring us closer toward achieving this goal.”

 Commentary in this issue’s Banking Perspectives includes:

• Regulation and Resolution: Toward a Unified Theory by Gregory Baer, JPMorgan Chase, which discusses single point of entry in the context of other regulatory reforms.
• Resolving Financial Companies: A Proposed Bankruptcy Code Alternative by Thomas Jackson, University of Rochester, which looks at the tension between the Bankruptcy Code and Orderly Liquidation Authority and possible amendments to the Bankruptcy Code.
• Single Point of Entry – A Strategy to Resolve Large and Complex Financial Companies by Rebecca Simmons, Sullivan & Cromwell, which evaluates the role of loss-absorbing, long-term debt in a single-point-of-entry recapitalization.
• Multiple Point of Entry: The Forgotten Alternative by James Chew, HSBC, which informs why multiple point of entry may be a preferred resolution strategy for some banks with a global footprint.
• Large Bank Resolutions: Toward a Preferred Path by Randall Guynn and Reena Agrawal Sahni, Davis Polk, which argues that the FDIC should clarify a “preferred path” for Title II resolutions to build on its recent Single Point of Entry Notice.
• International Coordination and Cooperation: Progress and Challenges in Large Bank Resolutions by M.P. Azevedo, PricewaterhouseCoopers, which investigates why and how global regulators should work together to achieve a globally-viable resolution framework.
• Certifying Continuity: The Role of Financial Market Infrastructures During Resolution by Thomas Huertas, Ernst & Young, which explores how to keep the continuity of financial market infrastructures in the face of a failure of a large, complex bank.

In addition to these articles, this edition of Banking Perspectives features an interview with HSBC U.S.A. CEO Irene Dorner, who sits down with TCH CEO Jim Aramanda to provide her insight on the future of banking and payments, the impact of global regulations, and how banks can rebuild trust in the industry.

 Former FDIC General Counsel Michael Krimminger, in this issue’s For the Record, also offers his take on the importance of a viable resolution framework in the context of broader progress made on financial regulatory reform.

 The second quarter issue of Banking Perspectives, which will be released in late June, will feature issues of particular importance to regional banks as well as an exploration of timely issues related to cybersecurity and emerging payments technology.

About The Clearing House Established in 1853, The Clearing House is the oldest banking association and payments company in the United States. It is owned by the world’s largest commercial banks, which collectively employ more than 1.4 million people and hold more than half of all U.S. deposits. The Clearing House Payments Company L.L.C. provides payment, clearing, and settlement services to its member banks and other financial institutions, clearing almost $2 trillion daily and representing nearly half of the automated-clearing-house, funds-transfer, and check-image payments made in the U.S. The Clearing House Association L.L.C. is a nonpartisan advocacy organization representing – through regulatory comment letters, amicus briefs, and white papers – the interests of its owner banks on a variety of systemically important banking issues.