Rochdale Securities’ Dick Bove told CNBChe doesn’t see the point of the bank "living wills."
These willsare meant to provide regulators with a blueprint in case they need to unwind a major global bank that has become insolvent.
“I don’t see what the purpose is of coming up with a new statement, because we’re still going to do it the way it was done 50 years ago,” Bove said.
There are four steps the Federal Deposit Insurance Corp. has historically followed in unwinding a bank, according to Bove. After equity holders get wiped out and bondholders have their bonds converted to equity at a significant discount, all the profitable divisions are sold to other parties, he said.
“Finally, all the nonprofitable entities of the bank are managed by the FDIC until they can be liquidated in a reasonable fashion,” Bove said.
Peter Boockvar of Miller Tabak said the
“If we ever get to this, these banks are done anyway,” Boockvar said.