In financial markets, a "living will" is:
A) a set of instructions of how a bank failure should be carried out.
B) a set of instructions of the order of repaying shareholders.
C) a list of steps that must be taken by all banks in the event of insolvency.
D) how bank bond and shareholders should divide a bank's remaining assets after insolvency.
E) a set of instructions regarding succession in the event of a bank president's death.

Question

Quizplus · Accepted Answer

A "living will" in financial markets is a set of instructions outlining how a bank failure should be carried out, including which assets and liabilities should be sold or transferred. It is designed to prevent a repeat of the 2008 financial crisis, during which taxpayers were forced to bail out failing banks.

In Financial Markets, a "Living Will" Is