US banks rewrite contracts to shed too-big-to-fail image

Washington

WALL Street is poised to expand a rewrite of financial contracts worth trillions of dollars in an effort to persuade regulators that giant banks can be wound down without hurting the broader economy.

The trading and lending agreements being reworked are part of the grease that makes the global financial system function. The changes are expected to allow certain securities and funding contracts to remain intact for as long as 48 hours after a bank fails, said three people with knowledge of the matter.