The FDIC and the Canada Deposit Insurance Corporation (the “CDIC”) have entered into a Memorandum of Understanding (the “MOU”) intended to facilitate the exchange of information and cooperation between the two agencies with respect to monitoring of firms with cross-border operations in the United States and Canada for crisis management, recovery and resolution planning and implementation purposes. The MOU relates to sharing of information concerning entities designated as globally systemically important by the Financial Stability Board, entities that are subject to the jurisdiction of either the FDIC or the CDIC as an authorized credit institution that is a depository institution, and member institutions under the Canada Deposit Insurance Act (including their affiliates) engaged in financial services activities in the United States and Canada. The MOU states that its information sharing provisions relate to the CDIC’s and FDIC’s respective roles as resolution authorities and not to ongoing prudential supervision. Although the MOU states that it does not create any legally binding obligations or supersede any laws applicable to the FDIC or CDIC, it creates a framework that the FDIC could potentially use in the event that it becomes the receiver or conservator under the Federal Deposit Insurance Act or the orderly liquidation authority provided by the Dodd-Frank Act with respect to an insured depository institution or a covered financial company with both U.S. and Canadian operations.
Alert June 18, 2013