Bank failures can have significant implications for companies, both in terms of meeting financial obligations and ensuring business continuity. Following a bank failure, it is critical for a company to quickly identify its immediate-term risks and develop mitigation plans for maintaining business continuity and limiting the potential for downstream liability.
Wolters Kluwer Legal & Regulatory U.S. has prepared a Risk Exposure Checklist for corporate legal departments that outlines the process for determining your risk and identifying any financial or legal obligations that may be impacted by a bank failure. It identifies the key steps you can take to determine risk exposure with respect to existing obligations such as payroll, escrow, and lines of credit, and sets forth best practices for ensuring your obligations are met immediately after a bank failure.
The Risk Exposure Checklist covers the following key considerations:
- Review Existing Financial and Legal Obligations
- Conduct a Liquidity or Cash Flow Forecast
- Determine FDIC Coverage and Mitigating Steps for Ensuring Sufficient Liquidity to Cover Future Financial Obligations
The Risk Exposure Checklist: Determining Risk and Obligations in Wake of A Bank Failure is the third installment in a Wolters Kluwer Legal & Regulatory U.S. Toolkit.
Additional installments to mitigate your financial risk will be forthcoming over the next week.
