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Resolution Authority

Wednesday, August 6, 2014

Agencies Respond to Resolution Plans

The Federal Reserve and FDIC provided feedback on the second round of resolution plans filed by 11 large, complex banks in 2013. While the agencies noted some improvement from the original plans submitted in 2012, they also identified shortcomings.

Among other things, the agencies said the plans make unrealistic or inadequately supported assumptions, including about the likely behavior of consumers, investors or regulators. They also said the plans fail to make or identify the kinds of changes in firm structure and practices that would be needed for an orderly resolution of the institutions.

The regulators have sent letters detailing the shortcomings and advised the banks — which are part of the first wave of institutions to submit living wills under the Dodd-Frank Act — to demonstrate significant progress in addressing the shortcomings in the plans due next July.

ABA has been working with regulators to clarify expectations and procedures related to living wills and will continue to do so as bankers and regulators alike seek to make the living wills requirement an effective and successful regulatory tool.

Read more.
FDIC Chairman Martin J. Gruenberg's statement.
FDIC Vice-Chairman Thomas M. Hoenig's statement.
FDIC Director Jeremiah O. Norton's statement.

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