Section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") requires large bank holding companies and systemically important nonbank financial companies to prepare plans for their rapid and orderly resolution under the Bankruptcy Code in the event of material financial distress or failure. The recent release of two rules on resolution planning by the FDIC and the Federal Reserve means that the basic contours of the U.S. regulatory framework for resolution plans are now known. In this article, we have focused on how certain aspects of the rules and their implementation by regulators are likely to have a different impact on regional bank holding companies and certain foreign banking organizations, than on other firms subject to the requirements.


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On July 22, 2011, the U.S. Court of Appeals for the District of Columbia (the "D.C. Circuit") found that the Securities and Exchange Commission ("SEC") acted arbitrarily and capriciously in adopting proxy voting rules, Rule 14a-11. Although the SEC's adopting release devoted 60 pages to a cost-benefit analysis of this rule, the D.C. Circuit vacated Rule 14a-11 on the basis that the SEC "failed adequately to consider [Rule 14a-11's] effect upon efficiency, competition, and capital formation." Business Roundtable v. SEC. In reaching this conclusion, the court sharply criticized the SEC's efforts, at one point calling them "unutterably mindless."


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On August 16, 2011, the Office of the Superintendent of Financial Institutions Canada (OSFI) became the first banking regulatory authority to issue detailed guidance on its expectations regarding the implementation of the non-viability contingent capital (NVCC) requirements of Basel III. These rules will require all non-common capital instruments to contain features that require them to be converted into common shares if the institution becomes non-viable. The OSFI advisory sets out the NVCC criteria that the capital of Canadian banks, bank holding companies and trust and loan companies (collectively, deposit-taking institutions, or DTIs) must meet for it to qualify as capital for regulatory purposes. While it is still uncertain whether or to what extent the U.S. regulatory authorities will apply the Basel III rules, the OSFI advisory is particularly noteworthy in that its application extends to Canadian banking subsidiaries of non-Canadian banks (including U.S. banks). Thus, given the potential relevance to U.S. financial institutions, it is important to understand and appreciate the Basel III capital rules and the NVCC advisory produced by OSFI. This article provides a basic summary of the NVCC requirements and OSFI's guidelines, in addition to a discussion about some of the concerns and implications of these new rules.


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We thought we were done with financial crisis books (The Big Short, Chain of Blame, Fooling Some of the People All of the Time, The Greatest Trade Ever, Too Big To Fail, No One Would Listen, and even parts of the Financial Crisis Inquiry Commission's massive report on the subprime crisis). Fortunately, most attorneys in private practice witnessed the economic aftermath of the crisis from the sidelines, but nearly everyone knows those who've lost jobs or their financial footing. The uniform theme of recent financial crisis books is that a huge bill has been handed to the public by financial institutions, their shareholders, directors, and executives. But until very recently, there has been very little public reaction.


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