CONTACT: Barbara Hagenbaugh
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bhagenbaugh@fsforum.com
No deficiencies cited by regulators in largest U.S. banks’ living wills
Washington, D.C. – Financial Services Forum President and CEO Kevin Fromer issued the following statement today after the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) issued their findings on living wills submitted by Forum member institutions in mid-2021:
“The nation’s largest banks are strong, resilient, and meeting the requirement to have effective resolution plans in place, one of a number of stringent post-crisis reforms. The agencies found no deficiencies in their review of the firms’ resolution plans, which reaffirms that the firms have a strategy in place to be resolved in an orderly way, without cost to taxpayers. The agencies have repeatedly reached the same conclusion during the past decade, further demonstrating the ongoing commitment of the largest U.S. banks to the safety of the financial system.
“The nation’s largest banks are vital to the economy of the United States and to U.S. international competitiveness. Forum members and federal regulators have worked to help solidify the strength and safety of our financial system since the financial crisis. This strength was on display during the real-life stress test of the pandemic, in which the nation’s largest banks showed that they are positioned to continue to support the economy even during a significant and sudden economic downturn.”
Background:
The Dodd-Frank Act requires that large financial institutions submit resolution plans, commonly known as living wills, describing the company’s strategy for rapid and orderly resolution in bankruptcy in the event of material financial distress or failure of the company.
The Federal Reserve and FDIC in 2019 amended the process for living will submissions requiring the largest banks to submit plans with a limited, targeted scope every other submission, noting: “The largest firms have improved their resolution strategies and governance, refined their estimates of liquidity and capital needs in resolution, and simplified their legal structures. These changes have made the firms substantially more resilient.”
The Federal Reserve and FDIC—the agencies charged with reviewing and assessing living wills—today said they did not identify any deficiencies in the 2021 targeted submissions by Forum member institutions.
To learn more about the advancements by Forum member institutions to promote financial stability, read “The Regulatory Reality.”
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The Financial Services Forum is an economic policy and advocacy organization whose members are the chief executive officers of the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, financial inclusion, deep and liquid capital markets, a competitive global marketplace, and a sound financial system.
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