The financial crisis of 2008 ushered in a new era of regulatory reform in the United States. The failure of several large banks prompted Congressional scrutiny ofthe U.S. bank regulatory system. Many critics highlighted the government's failure to intervene to prevent Lehman Brothers' insolvency, which resulted in economic turmoil not yet resolved. Against this backdrop, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") in July 2010.
Dodd-Frank mandates institutional changes to minimize economic instability and establishes regulatory processes to guide the government's response to future bank failures. At the heart of the regulation is the Orderly Liquidation Authority, which outlines a federal resolution process for "systemically significant" financial companies. The Orderly Liquidation Authority gives the Federal Deposit Insurance Corporation ("FDIC") authority to liquidate a failed financial company after the Secretary of the Treasury has determined that government receivership is necessary.
Business Organizations Law | Law | Securities Law
Dorothy S. Lund,
Federalizing Fiduciary Duty: The Altered Scope of Officer Fiduciary Duty Following Orderly Liquidation Under Dodd-Frank,
Stan. J. L. Bus. & Fin.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/4003