One of the unresolved issues that arose for financial regulators out of the financial crisis of 2008-2009 was the problem of addressing the collapse or potential collapse of systemically important financial institutions, or “SIFIs,” in a manner that could avoid widespread harm to the U.S. economy. As was made evident by the failure of Lehman Brothers in the fall of 2008, regulators at that time found themselves in the position of having to choose between rescuing a failing institution at taxpayer expense or allowing the institution to fail and thereby subjecting the wider U.S. economy to the resultant significant financial disruption and dislocation. The Federal Deposit Insurance Corporation (FDIC), on Dec. 10, 2013 issued for public comment a notice setting forth its strategy, the “Single Point of Entry (SPOE)” strategy, for addressing this still unresolved major public policy concern and related “too big to fail” issues.1
Since the enactment of the Dodd-Frank Consumer Protection and Wall Street Reform Act (Dodd-Frank) in 2010, the FDIC has been working to develop its method of implementing Title II of Dodd-Frank, the Orderly Liquidation Authority (OLA). The OLA created a new regime of federal receivership that allows the FDIC to serve as receiver of financial companies on the brink of failure whose actual failure has been determined to pose a systemic risk to the U.S. economy.2 As the receiver, the FDIC succeeds to all rights, titles, powers and privileges of the company and its assets, may conduct all business and perform all functions of the company and is empowered to liquidate and wind up the affairs of the company.3 In developing SPOE as a strategy to implement OLA, the FDIC has had to factor in a number of impediments that are particularly problematic for large, global interconnected SIFIs.
