Alert January 26, 2010

FDIC and Bank of England Sign Memorandum of Understanding Regarding Enhanced Cooperation in Resolving Troubled Cross-Border Depository Institutions

The FDIC and the Bank of England signed a memorandum of understanding (“MOU”) under the terms of which they have agreed to expand their cooperation when they act to resolve troubled depository institutions that have activities in both the United States and the United Kingdom.  In the MOU, the FDIC and the Bank of England stressed the importance of “close and effective communication about the operations of financial institutions [subject to differing national laws], consultation on developing issues, cooperative contingency planning … and supporting the development of appropriate recovery (going concern) and resolution (gone concern) plans.”

Under the MOU the FDIC and the Bank of England also agree to work closely with other regulatory authorities in the U.S. and the U.K. in connection with the resolution of troubled cross-border financial institutions.  FDIC Chairman Bair stated that the MOU is an important step toward implementing the recommendations of the Basel Committee’s Cross Border Resolution Group.