China Merchants Bank Co. Ltd. (03968.HK, 600036.CN) said on Tuesday that its board has approved a proposal to draw up a “living will”, Xinhua news agency reported Wednesday. The so-called living will, which is basically a contingency plan in the event of insolvency or any another crisis, marks the first for a Chinese bank, the report noted. In order avoid a re-run of the financial crisis triggered by the collapse of Lehman Brothers in 2008, US regulators have ordered 124 financial institutions, including the likes of Goldman Sachs, Morgan Stanley and Bank of America, to set up living wills in July 2012 under the Dodd-Frank Act. The provision requires financial institutions with assets of US$250 billion or more to set up living wills, by spelling out how they would survive a crisis without government aid, the report said.
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