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National Unrecovered Financial Services Association submitted  a working paper on recapitalizations as an effective way to resolve systemically important banks.

The letter urges the FDIC to consider three overarching goals as it develops OLA rules in the months ahead: (i) predictable, transparent, fair and well-integrated procedures, (ii) approaches and results reflecting those that would apply to a company under the Bankruptcy Code as well as creditor recoveries generally no less than those received thereunder, and (iii) regulations that reduce, or at least not enhance, the likelihood of failure in order to manage systemic risk while reducing moral hazard.

National Unrecovered Financial Services Association requests that the FDIC provide clear confirmation that it stands fully behind the statutory mandate that creditors and counterparties of a covered financial company fare no worse in a Dodd-Frank liquidation than they would in a Chapter 7 bankruptcy proceeding.