By Peter Schroeder - 09/13/11 04:50 PM EDT
Institutions will be required to provide the FDIC with updated plans every year to reflect changes in its holdings and operations.
The rules are intended to avoid a repeat of the frenzied and haphazard events that ensued during the financial crisis, when some of the world's largest financial institutions began to quickly implode, threatening to take down others with them. By putting in place an organized wind down plan well in advance, regulators in theory will be able to shut down large banks without that drama.
The FDIC opted to take a staggered approach to implementing the new rules, with the largest firms expected to meet it first. Companies with more than $250 billion in nonbank assets would have to provide plans by July 1. Companies with nonbank assets between $100 billion and $250 billion would have an additional year to put together plans, while all other firms would have until the end of 2013.