Richmond Federal Reserve Bank President Jeffrey Lacker said that federal financial regulators must remove the implicit view from creditors that the government will step in to protect large financial institutions, and better adapt the Bankruptcy Code to these firms, Reuters reported yesterday. Lacker called for the repeal of the Fed's remaining emergency lending powers and further restraining the central bank's ability to lend to failing institutions. He added that the Bankruptcy Code, properly applied to financial institutions, would then no longer require the Federal Deposit Insurance Corp.’s involvement in winding down big banks. "Once robust and credible resolution plans are in place, we would be able to responsibly wind down the FDIC’s Orderly Liquidation Authority and related financing mechanisms," Lacker said. To read Lacker’s full speech, please click here: https://www.richmondfed.org/press_room/speeches/president_jeff_lacker/2…
