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2.17 Study on Secured Creditor Haircuts

<< Title II Overview

2.17 Study on Secured Creditor Haircuts

 

 


2.17.     Study on Secured Creditor Haircuts.   The Oversight Council is required to conduct a study that evaluates the importance of maximizing taxpayer protections and promoting market discipline in regard to the treatment of fully secured creditors in connection with the utilization of orderly resolution authority.  Among other matters, the Oversight Council is to examine how a haircut on secured creditors could improve market discipline and protect taxpayers.  The Oversight Council is also to examine the behavior of creditors who are unsecured or under-collateralized and who seek collateral when a firm is failing, and the impact such behavior has on financial stability and an orderly resolution that protects taxpayers if the firm fails.  The Oversight Council must provide a report to Congress on its findings and recommendations no later than 1 year after the enactment of the Act.  [§215]