meierlde
Thinks s/he gets paid by the post
I believe that the Bankruptcy Reform Act of 2005 changed that but I am no expert.
" For starters, the FDIC does not have the sole right to prevent BOA or any other Too Big To Fail Bank from using the Bankruptcy Code to prefer payment to derivatives' counter-parties before making FDIC insured depositors whole."
Why the FDIC is Upset With Bank of America's Derivatives Transfer Despite Dodd-Frank
Note that regulated banks can not file bankruptcy "The section of the Bankruptcy code that governs which entities are permitted to file a bankruptcy petition is 11 U.S.C. § 109. Banks and other deposit institutions, insurance companies, railroads, and certain other financial institutions and entities regulated by the federal and state governments, and Private and Personal Trusts, except Statutory Business Trusts, as permitted by some States, cannot be a debtor under the Bankruptcy Code. Instead, special state and federal laws govern the liquidation or reorganization of these companies. In the U.S. context at least, it is incorrect to refer to a bank or insurer as being "bankrupt". The terms "insolvent", "in liquidation", or "in receivership" would be appropriate under some circumstances." (From Wikipedia on Bankruptcy).
The holding company might file bankruptcy but not the bank subsidiary.
Rather the FDIC takes the bank over and assigns a reciever. This is why the discussions of where the derivatives are held is important.