10 August 2012, Reuters published an exclusive report revealing that U.S. banks were ordered to make “living wills”, because of an expected economic collapse!

The order came from the privately run Federal Reserve Bank, and the U.S. Office of the Comptroller of the Currency.  The 2010 order was targeted at five U.S. national banks: Citigroup, Morgan Stanley, JP Morgan Chase, Bank of America and Goldman Sachs.

Both the Federal Reserve and the U.S. government indicated that there was no way to save the banking industry in a full blown economic collapse: “…make no assumption of extraordinary support from the public sector…”

The Reuters’ report explained that living wills for corporations are not the same as bailouts/recovery plans.  In the living will the too big to fail bank is basically finished, but directs how any remaining assets shall be liquidated (sold off) in order to prevent a total collapse of the banking/finance system.

Already, nine international banks have submitted their living wills to the Federal Reserve and the Federal Deposit Insurance Corporation.