Volcker Named to Panel Advising Too-Big-to-Fail

Bloomberg:

Former Federal Reserve Chairman Paul Volcker and former Citigroup Inc. (C) co-chairman John Reed have been named to a Federal Deposit Insurance Corp. panel that will help the agency map strategy for unwinding too-big-to-fail financial firms when they collapse.

Volcker, who advised President Barack Obama during negotiations over what became the Dodd-Frank Act, was named to the FDIC’s 18-member Advisory Committee on Systemic Resolutions along with Reed and current executives including BlackRock Inc. (BLK) fixed-income chief Peter Fisher. The panel’s first meeting is set for June 21.

“Congress has given the FDIC a tremendous amount of responsibility to ensure that financial organizations formerly deemed too big to fail will no longer receive taxpayer funded bailouts,” FDIC Chairman Sheila Bair said today in a statement. “The Advisory Committee we created brings together some of the best and brightest minds to augment the groundwork that the FDIC has already put into place.”

Dodd-Frank, the regulatory overhaul enacted last year, gave the FDIC expanded power for resolving systemically important financial firms in the event of a collapse. Lawmakers granted the authority to prevent a repeat of the market tumult that followed the September 2008 bankruptcy of Lehman Brothers Holdings Inc., which sparked a credit freeze that led to government bailouts for companies including Citigroup.