U.S. banking regulators said Friday that they will publish the so-called “living wills” proposed by the largest U.S. banks next week.
The U.S. Federal Deposit Insurance Corporation (FDIC) and the U.S. Federal Reserve Board (Fed) announced the process for evaluating the resolution plans, or living wills, of the largest U.S. banks. Regulatory reform in the United States requires banks with at least $50 billion in assets to submit plans for winding up the firm in the event that it fails or runs into serious financial trouble. Each plan must describe the company’s strategy for rapid and orderly resolution.
The first set of plans is to be submitted by the very biggest banks, those with over US$250 billion in assets, which includes Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan Chase, Morgan Stanley and UBS. Those plans are due July 2.
On Friday, the regulators said that they will release the public portion of those plans by the end of July 3. The public section of the plans will contain detailed information, including a description of the company’s core business lines and financial information regarding assets, liabilities, capital, and major funding sources.
The FDIC and the Fed must review each resolution plan and jointly determine whether a resolution plan is credible or not. The regulators say they aim to review the plans for informational completeness within 60 days; and assess them for compliance with the requirements of the rule after that.