Avoiding the Next Big Bailout.

The article considers a plan by the U.S. Federal Deposit Insurance Corp. (FDIC) to respond to a future failure of a large U.S. bank or financial institution. The plan calls for stockholders of failed banks to lose all equity, while bondholders would face losses as they would receive equity in a new bank created by the FDIC after it places the failed bank in receivership. Foreign subsidiaries of a failed bank holding company would be allowed to operate with funds from the FDIC-owned bank.