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FDIC Releases Public Portion Of SIFI’s ‘Living Wills’

The Federal Reserve Board and the Federal Deposit Insurance Corp (FDIC) released the public portions of 17 bank resolution plans, a requirement for all banks with more than $50 billion in assets under the Dodd-Frank Act as well as some non-bank financial organizations designated as systemically important financial institutions by the Financial Stability Oversight Council (FSOC).

FDIC – Largest banks have to submit mid-year; others have until December

The resolution plans are an attempt to directly address too-big-to-fail by forcing banks to explain how they could be wound down in an orderly manner if their business fails. Hopefully we won’t have to find out whether these ‘living wills’ are realistic, or if more than one can be implemented at the same time, but not many people think that the problem of banks being too big to fail has actually been solved.

The July 1 deadline is for the largest banks, typically those with more than $100 billion in assets, and a few non-bank SIFIs. Banks with assets between $50 billion and $100 billion in assets have until the end of the year to finish their resolution plans. The public portions of the plans that are available on the FDIC website haven’t been reviewed, presumably the FDIC will just stick to the confidential portions that have complete information, but if the FDIC finds a problem we should hear about it.

FDIC – BNP Paribas and RBS received an extension to October 1 on bank resolution plans

The fourteen banks whose plans were released included: Bank of America Corp (NYSE:BAC), The Bank of New York Mellon Corporation (NYSE:BK), Barclays PLC (NYSE:BCS) (LON:BARC), Citigroup Inc (NYSE:C), Credit Suisse Group AG (ADR) (NYSE:CS), Deutsche Bank AG (NYSE:DB) (ETR:DBK) (FRA:DB), Goldman Sachs Group Inc (NYSE:GS), HSBC Holdings plc (ADR) (NYSE:HSBC) (LON:HSBA), JPMorgan Chase & Co. (NYSE:JPM), Morgan Stanley (NYSE:MS), State Street Corporation (NYSE:STT), UBS AG (NYSE:UBS), and Wells Fargo & Co (NYSE:WFC). All fourteen of these megacap banks were submitting resolution plans for the second time.

FDIC on non-bank SIFIs

In addition, Bankia SA (MCE:BKIA) (OTCMKTS:BNKXF) and the non-banks SIFIs Americ American International Group Inc (NYSE:AIG), Prudential Financial Inc (NYSE:PRU), and General Electric Capital Corporation submitted their initial resolution plans for the July 1 deadline. BNP Paribas SA (EPA:BNP) (OTCMKTS:BNPQY) and Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) were granted extensions and are expected to submit their second resolution plans by October 1 this year.